GBP: Could Breach 1.30 But Selling Looking Stretched; Could Reverse On A ‘Sliver Of Good News’ – MUFG

GBP/USD is attempting to recovery but still lags behind the euro and other peers. What’s next?

Here is their view, courtesy of eFXdata:

MUFG Research discusses GBP/USD outlook and maintains the view that even if 1.30 gets breached in the near-term, the pair could reverse course and bounces higher on any good news on the Brexit front.

“With the dollar still being supported by positive economic cyclical factors, the very short-term risk continues to be that GBP/USD will breach the 1.3000 level,” MUFG notes.

“Yesterday we highlighted the potential for a rebound in GBP (see here) – and that potential is very much tied now to the release of the government’s White Paper on Brexit

GBP sentiment remains poor and selling is beginning to look stretched and in such circumstances, a sliver of good news can have a more notable impact in reversing sentiment,” MUFG adds.

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