GBP/USD: Downside Corrective & Positioning-Induced; EUR/GBP: Rallies A Sell – Credit Agricole

The pound is under pressure from the US Dollar, but still trying to recover. What’s next? Here is the view on both GBP/USD and EUR/GBP:

Here is their view, courtesy of eFXdata:

Credit Agricole CIB Research discusses GBP outlook and thinks that the recent downside is only corrective, while sees GBP dips a buy vs EUR (selling EUR/GBP rallies)

“When considering that speculative-investors have been building up sizeable GBP-long positions for most of the last few weeks and as the latest data failed to drive central bank rate expectations higher, recent downside can be regarded as position-squaring and therefore corrective in nature.

However, we remain of the view that the BoE is on track towards tightening monetary policy as soon as May and such prospects should put a floor below the GBP from the current levels.

If anything the currency may be close to buying territory and dips against the likes of the EUR may be bought,” CACIB argues.

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