Thursday, April 27, 2017 4:41 AM EDT
The pound is on the move higher after the elections announcement. After the initial move, it consolidated its gains. What’s next?
Here is their view, courtesy of eFXnews:
NAB FX Strategy Research notes that GBP has surged since the announcement of early UK elections.
In that regard, NAB argues that while there are several reasons for the GBP outperformance, they must all be considered in the context of the near-record volume of outstanding short positions in the currency.
What’s next?
NAB looks for the peak in GBP to come at or around the time of the General Election of June 8th and for the slow and steady grind of Brexit news and negotiations then to take its toll on the currency through the second half of 2017.
“A better political backdrop at home doesn’t translate straight across into an improved economic outlook and the GBP’s better near-term performance is not expected to last,” NAB adds.
In line with this view, NAB targets GBP/USD at 1.31 by end of June, 1.29 by end of October, and 1.27 by end of the year.
GBP/USD is trading circa 1.2846 as of writing
Disclaimer: Foreign exchange (Forex) trading carries a high level of risk and may not be suitable for all investors. The risk grows as the leverage is higher. Investment objectives, risk appetite and the trader's level of experience should be carefully weighed before entering the Forex market. There is always a possibility of losing some or all of your initial investment / deposit, so you should not invest money which you cannot afford to lose. The high risk that is involved with currency trading must be known to you. Please ask for advice from an independent financial advisor before entering this market. Any comments made on Forex Crunch or on other sites that have received permission to republish the content originating on Forex Crunch reflect the opinions of the individual authors and do not necessarily represent the opinions of any of Forex Crunch's authorized authors. Forex Crunch has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: Omissions and errors may occur. Any news, analysis, opinion, price quote or any other information contained on Forex Crunch and permitted re-published content should be taken as general market commentary. This is by no means investment advice. Forex Crunch will not accept liability for any damage, loss, including without limitation to, any profit or loss, which may either arise directly or indirectly from use of such information.
less
How did you like this article? Let us know so we can better customize your reading experience.