GBP/USD: Dips Below 1.40 A Good Buying Opportunity Targeting 1.45 In Q1 – ING

The pound has been under the cosh due to USD strength, but hasn’t fallen that far. What’s next?

Here is their view, courtesy of eFXnews:

ING Research discusses GBP/USD outlook ahead of the BoE policy meeting on Thursday and thinks that investors should consider buying its dips below 1.40 to position for a rally towards 1.45 in Q1.

“While there is certainly greater noise and uncertainty surrounding a transition deal – and tough talks between UK and EU officials – we believe Brexit dynamics have not been the driving force behind GBP’s latest corrective move lower.

While a more hawkish tilt from the BoE tomorrow may not be (a) obvious and (b) result in material GBP upside until a Brexit transition deal looks more definitive, we see the dip in GBP/USD below 1.40 as a good buying opportunity amid a structurally weak $ backdrop. Still targeting 1.45 in 1Q18 as the UK economy regains some of its cyclical swagger,” ING argues.

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