GBP in the bad books – TDS

FXStreet (Guatemala) – Analysts at TD Securities explained that they have downgraded their bullish sterling outlook as the UK economy has lost some momentum in recent months and we have pushed back our call for the first BoE rate hike to November.

Key Quotes:

“‘Brexit’ concerns have picked up since the start of the year, adding to sterling’s uncertainty. We think the UK will remain in the EU and would discount those suggesting rising vols are flagging rising risks, with options still offering value for those wishing to position for or hedge against these risks.

While weakness in GBP/USD has accelerated, we think the current downtrend may run a bit further. We see scope for spot to challenge support at 1.4230 before the risk of a more meaningful correction arises. A further extension lower could put long-term support around 1.35 into view.

We see GBP also weaker against the EUR, but our ambition there is more subdued. On a move above 0.7650, EUR/GBP may climb to test resistance at 0.7760.

2016H2 should be kinder, however, as eventual BoE tightening comes into view and a modest reversal of USD strength also provides a supportive tailwind.”

Analysts at TD Securities explained that they have downgraded their bullish sterling outlook as the UK economy has lost some momentum in recent months and we have pushed back our call for the first BoE rate hike to November.

(Market News Provided by FXstreet)