Sell Cable
On Thursday we recommended selling GBPUSD, targeting a move down to 1.5330 with a stop set at 1.6310. A run of strong data and firm UK front-end rates have supported the GBP this month, but our STEER™ framework suggests GBPUSD is now very rich to short-term drivers and our BNP Paribas FX Positioning Analysis indicates long positioning in Sterling is now very stretched. We think some combination of UK data disappointment, US data improvement, and dovish BOE messaging is likely to undermine GBPUSD in the weeks ahead and that risk-reward is attractive for new shorts at current levels above 1.60 heading into important data next week.
Read the full report: FX Daily
BNP Paribas