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Analysts at Citibank point out the British Pound is fundamentally cheap. They consider a return to normality may see the pound trade more constructively, pushing GBP/USD back to levels seen at the beginning of 2020. 

Key Quotes:

“Heightened risk aversion in global equity markets may weigh on Sterling, as will further QE from the BoE (Bank of England). We are dis-inclined to forecast more material GBP strength over 6-12m given the Brexit Transition Phase has not been extended yet. However, GBP is fundamentally cheap, and we note the reluctance of Cable to trade below 1.18. A return to a more ‘normal’ economic/ market regime may see GBP trade more constructively and drift back towards levels witnessed at the beginning of 2020.”

“GBPUSD has moved above the double top neckline a 2nd time increasing the chance of GBP backing to double top at 1.2648, with support at 1.2248 and 1.1959.”