28 Apr 2015
GBP/USD seen at 1.43 in 3-months – Danske Bank
FXStreet (Edinburgh) - Lars Christensen, Chief Analyst at Danske Bank, believes the pair could head towards 1.43 in a 3-month horizon.
Key Quotes
“GBP/USD broke above 1.5250 for the first time since the beginning of March along with the USD sell-off”.
“Fundamentally, we look for renewed downside in GBP/USD in the coming months supported by higher US interest rates as described above”.
“Moreover, we expect the market to price in an increased risk premium on the GBP before the UK election on 7 May. Over the past four elections, GBP/USD has declined in the two weeks prior election day and given the high uncertainty about the election outcome, we think it is fair to assume that this will happen again”.
“Finally we note that according to the latest IMM data, speculative investors reduced their short GBP positions last week to the least bearish level since the start of March”.
“Hence, from a positioning point of view, there should be plenty of room for speculatively GBP selling going into the UK election. We are bearish on GBP/USD targeting the cross at 1.43 in three months”.
Key Quotes
“GBP/USD broke above 1.5250 for the first time since the beginning of March along with the USD sell-off”.
“Fundamentally, we look for renewed downside in GBP/USD in the coming months supported by higher US interest rates as described above”.
“Moreover, we expect the market to price in an increased risk premium on the GBP before the UK election on 7 May. Over the past four elections, GBP/USD has declined in the two weeks prior election day and given the high uncertainty about the election outcome, we think it is fair to assume that this will happen again”.
“Finally we note that according to the latest IMM data, speculative investors reduced their short GBP positions last week to the least bearish level since the start of March”.
“Hence, from a positioning point of view, there should be plenty of room for speculatively GBP selling going into the UK election. We are bearish on GBP/USD targeting the cross at 1.43 in three months”.