4 Jul 2013
Flash: GBP/USD operating in a buy zone – RBS
FXstreet.com (New York) - According to the FX Strategy Team, “Simply eyeballing a year-to-date chart of GBP/USD suggests that 1.50 - 1.5200 is a buy zone for different types of investors.”
Moreover, “If this fails to hold and we start printing closes below 1.5000, the outlook would be far more bearish, in our view. While this looks unlikely short-term, the longer we remain in a broad 1.50-1.55 range, the greater the risk will be that corporate hedge ratios get filled and oversold indicators level off.” the team adds.
We also expect GBP/USD rallies to become shallower as the year progresses. With UK data having ticked higher and the ECB looking set to sound neutral/cautious on Thursday, risks look skewed to the downside for EUR/GBP near-term.
Moreover, “If this fails to hold and we start printing closes below 1.5000, the outlook would be far more bearish, in our view. While this looks unlikely short-term, the longer we remain in a broad 1.50-1.55 range, the greater the risk will be that corporate hedge ratios get filled and oversold indicators level off.” the team adds.
We also expect GBP/USD rallies to become shallower as the year progresses. With UK data having ticked higher and the ECB looking set to sound neutral/cautious on Thursday, risks look skewed to the downside for EUR/GBP near-term.