Pound/dollar lost some ground due to the NFP and is also pressured by Brexit. What’s next? Here are two opinions:
Here is their view, courtesy of eFXnews:
GBP/USD: Make Or Break At 1.2316 – JP Morgan
JP Morgan FX Technical Strategy notes that GBP/USD is at risk of resuming its broader down-consolidation but for this to be indicated it would take a break below 1.2316 which if seen would target a deeper setback to 1.2229, to 1.1988 or to 1.1794.
However, If this level at 1.2316 holds on a daily closing basis, JP expects GBP/USD to maintain its recent narrow range against a break of 1.2631 to the upside.
Such a break above 1.2631 if seen would suggest a broader recovery towards 1.2839 en-route to 1.3187, JPM argues.
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GBP: A ‘Heap Of Trouble’ In The Pipe But Patience Needed – SocGen
Societe Generale FX Strategy Research notes that in the near-term, GBP could still get some support from positions and valuations.
As such, SocGen advises medium-term GBP bears to remain patient awaiting for a fresh trigger for Sterling weakness.
“A cocktail of foreign appetite for UK direct investment and net inflows in bonds does nothing to encourage the Sterling bear who left waiting for Sterling to be weakened by events elsewhere, or by the UK economy weakening…Both are likely and both still convince us that the EUR/GBP will head higher. But patience is going to be needed,” SocGen argues.Get the 5 most predictable currency pairs