GBPUSD Update, Pound Remains a Sell into Strength Play

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GBPUSD, Daily

The GBPUSD pair continued to grind lower at the start of the week after remarks from BoE MPC Martin Weale, highlighting that “the factors pushing down inflation have become a bit more prolonged”. Price has since recovered from the early sell-off and is currently trading higher for the day. The fundamental outlook, in my view, supports that the GBP will continue to weaken vs the USD for some time to come and that traders should be ready to resell the pair on bounces.

Technically, the GBPUSD remains within a bearish channel over the mid term. I would be on alert for entering new short sales during periods of strength with any price bounce off the current levels (1.4920) to stop near the 1.5110 area, provided that price fails to break below the 1.4860 zone. Otherwise, my short term GBPUSD view supports sell positions near the 1.4955-1.50 area for a 1.4813 target.

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Senior Currency Strategist

HotForex

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