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Aug 24 - 01:55 PM

GBP/USD - Gets Oversold Bounce, But UK Outlook Worse Than US, 2020 Lows Possible

By Content Admin  —  Aug 24 - 11:45 AM
  • Sterling and broader dollar off Wed's lows after Tues's ranges held

  • Sterling still lower but well off 1.17565 D3 Wed lows

  • Was unable to reach Tuesday's 1.1718 lows; 2020's trough at 1.1413

  • Huge 94bp spike up in 2-yr gilt-Tsy yields spreads since Aug. 9 base

  • Gilt yield spike is due to fear BOE's hikes still lag behind inflation

  • UK/EU are more exposed to surging energy prices than the US, weighs

  • Fed seen more likely to tackle inflation with larger hikes

  • Sterling is oversold with bullish divergence on weekly RSIs

  • But the 161.8% Fibo target off the 1.4250 2021 peak is at 1.1400

  • That's overly coincidental to the 2020 pandemic low at 1.1413

  • Downtrend's intact w/o a close above the daily cloud top at 1.2214

For more click on FXBUZ


Source:
Refinitiv IFR Research/Market Commentary

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