FXStreet (Edinburgh) – Analysts at BBH assessed the recent developments in GBP/USD.
Key Quotes
“Sterling has fallen out of favor. It was the market’s darling, rallying from $1.4565 in mid-April to $1.5815 in mid-May”.
“From a technical point of view it was correcting the slide from last July’s test on $1.7200. The fundamental trigger for the correction was the weaker US dollar environment, which was partly spurred by disappointing Q1 data. The unexpected majority victory by the Tories also helped fuel sterling gains”.
“That upside correction faltered as it approached the 50% retracement objective (~$1.5880)”.
“The fundamentals considerations behind sterling’s loss of favor has been the stronger US data, signals from the Fed’s leadership that a rate hike this year is still very much in the cards, weaker UK data, including the CPI slipping into negative territory”.
“Today is the fifth consecutive session sterling has fallen. Sterling is approaching the 50% retracement of its month long bounce. That retracement objective comes in just below $1.5200. The pre-election dip saw sterling toward $1.5090. The 61.8% retracement comes in near $1.5045”.
(Market News Provided by FXstreet)