GBP/USD flirted with the 1.40 level but has retreated after the initial move. What’s next? It may have reached overbought territory.
Here is their view, courtesy of eFXnews:
Credit Agricole CIB Research discusses GBP outlook and advises against buying the currency around its current stretched levels.
“All eyes will be on the release of Q4 GDP and November labour data this week. When it comes to employment, all eyes will be on wage-price developments. We believe there is a low risk that upcoming earnings data will indicate rising domestically driven upside risks to inflation
Such prospects should prevent the GBP from facing more considerable upside, particularly as speculative GBP long positioning is now close to multi-year extremes. Hence, the currency may well have reached overbought territory,” CACIB argues.
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