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FxWirePro Call Review: GBP/USD trapped in bull-bear fight in short term; maintain bearish outlook over longer horizon

In Late January, in an article named, “FxWirePro: Sell pound targeting 1.376 against dollar”, available at https://www.econotimes.com/FxWirePro-Sell-pound-targeting-1376-against-dollar-1122287 we warned that the recent strength of the Pound, which has been fueled by a weaker dollar, an initial agreement between the United Kingdom and the European Union over Brexit bill and two year transition period, and a hawkish Bank of England (BoE) might fade quickly over the domestic political uncertainty brewing in the UK. We also warned that the risk of a correction in the dollar is also hanging over the pound, which recently reached our bullish target of 1.43 against the dollar.

In that piece, we urged our readers to go short on the pound at the then current rate of 1.413 and at rallies around 1.42 against the USD targeting 1.376.

GBP/USD reached our stipulated target by March and in a separate article, named, “FxWirePro Call Review: GBP/USD target reached at 1.376; new target 1.354”, available at https://www.econotimes.com/FxWirePro-Call-Review-GBP-USD-target-reached-at-1376-new-target-1354-1177319 we suggested,

This week, the pound has reached our short side target of 1.376 and in this piece, we would like to extend that target to 1.354 and urge readers to book profit in 30 percent of the positions. The pound is currently trading at 1.374 against the USD.”

However, our latest calculations suggest that reaching the extended target won’t be a smooth one, as the pair remains trapped in a bull-bear fight. The bulls are looking to push the pound to as high as 1.43 against the dollar, whereas bears are eyeing 1.33 area. The pound is currently trading at 1.395 area.

Over the longer horizon, due to the fallouts of Brexit, which has started impacting the UK housing market already, we remain bearish on the pound against the dollar with parity as a target.

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