TD Research discusses GBP outlook and likes short exposure vs EUR and CHF in the near-term.
"What's the setup here? For starters, we think the short-term outlook offers a few challenges to the long GBP trade, which has already started to reverse hard. The fundamental picture has also turned a bit sour recently," TD notes.
"The first chart dusts off our current MRSI implied trading weights, where GBP has fallen to dead last. The signal was flat 50 days ago, but now it has reversed to indicate a deep short position. MRSI's short call is broad-based, with 5 of the 12 signals negative. They include important factors like equity momentum, terms of trade, positioning, and high-frequency fair value," TD adds.