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Nov 22 - 12:12 PM
GBP/USD - COMMENT-Sterling Rally: End Of The Beginning, Or Just The End
First appeared on eFXplus on Nov 22 - 10:20 AM

GBP/USD may be in for further weakness heading into Britain's Dec.
12 election after weak UK PMI
data pushed it below the 30-DMA.
Though the pound's one-week low of 1.2851 remained within its recent 1.3012-1.2769 range, cable's breach of the 30-DMA marks the first time it has fallen below it since Oct.
9, around the time the last month's rally accelerated
sharply.
Today's weakness may indicate a shift as sterling traders focus increasingly on the UK economy since the consistency of polls indicating a Tory victory in next month's election have reduced Brexit uncertainty.
If so, that's not necessarily good for the pound nL2N2810S1.
UK short-sterling futures have risen 5bps in the wake of the PMI, increasing odds for a possible BoE rate cut in H1 2020 FEDWATCH.
Weak UK economic conditions are likely to linger in the early stages after Brexit, keeping the BoE dovish nU8N1A4002.
A close below the weekly cloud base at 1.2886 and 30-DMA would put the Nov. 8 low of 1.2769 and 200-DMA in sharper view.


GBP Chart: Click here

Source:
Refinitiv IFR Research/Market Commentary

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