A bearish trading plan to sell GBP/USD to 1.2630 - Westpac

Analysts at Westpac offered a bearish trading plan for GBP/USD with an entry: Sell 50% at 1.2900, 50% at 1.2975, Stop: 1.3065, Target: 1.2630.

Key Quotes:

Rationale:

• Looking to sell into any further GBP squeeze into May, this is likely to be a two week strategy
• The 29th May EU-27 (ex UK) Brexit summit is likely to produce a strong stance for negotiations
• UK election support for GBP is likely to wane with over 5 weeks before polls
• Trump Administration reformed tax reform and other initiatives should partially re-instate recently unwound Trump trades
• Rebounds in US yields suggest a further USD rebound
• Pessimism over 1Q GDP likely to have overstated the pullback in activity as earnings hold strong."