the
pair hit a fresh session low of 1.5504 as the sudden fall in the
EUR/USD pair dragged the cable lower from the post UK industrial
production data.The USD dollar has found love across the board after the EUR/USD pair
broke below the psychological 1.10 handle. The losses in the common
currency also weighed over the British Pound. Meanwhile, the turmoil in
the Chinese markets also pushed commodity currencies – AUD, NZD, CAD
lower across the board.Paul Robson of RBS, offers the outlook for GBP/USD and the currencies behaviour to data and events, and further maintain a short position in the pair.
“Last week brought mixed news on activity but more bad news on the UK’s current account deficit. Over the past year, a large and widening deficit has been financed by Foreign Direct Investment (FDI) and net portfolio inflows. That funding could dry up ahead of the UK in/out EU Referendum, in our view.”
“We believe that GBP has already started to trade in much the same way as a currency dragged down by a significant current account deficit. Only on days when data inform on the UK interest rate debate does the currency appear to outperform, driven by relative short-term capital flows. On slower news days, the currency appears to struggle, most likely reflecting adverse long-term capital flows.”
“An underwhelming Euro area recovery, Greece exit risks and subdued global growth suggest the good days may become less common in H2:15.”
“Last week’s soft manufacturing PMI is a warning, in our view. We believe that a more robust service sector is increasingly the only thing standing in the way of GBP weakness. Adding to this is the risk that this week’s UK Budget sees a front-loading of fiscal tightening. Our preferred way of positioning for possible GBP under-performance is to short the currency against a globally stronger USD.”
so fundamental long term is change to bearish
so the recomendation for gbp/usd is bearish.we will waiting for technical sell and ignore buying signal for gbp/usd
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