“Our medium-term bias is for a choppy range to develop further, within the longer-term bear trend.”
“A move through 1.28-1.30 resistance is needed to question this view. That move should complete the bear cycle we have been in from the 2007 highs at 2.1160., even though long term, we still see the risk of another downside test”
“A major base is then expected to develop for an ultra-long term move back towards the 1.55-1.70 region.”
Worries over the outlook of the UK economy continued to weigh on the Pound on Thursday, despite the RICS house price balance demonstrating persistent robustness within the domestic housing market.
However, with markets still in a relatively jittery mood the GBP/USD exchange rate has remained on a narrow trend, as sentiment towards the ‘Greenback’ is still decidedly fragile.
While the US Dollar recovered from its earlier falls and in many cases advanced past its Tuesday levels, the Pound’s own increase in bullishness kept it at bay.
Sterling advanced due to mutterings of emergency stimulus from the European Central Bank (ECB) as well as hopes that Britain would be first in line for a Trump-trade-deal.
The British pound has managed to appreciate to 1.24 against the US Dollar (GBP USD) today, though this is a step down from its earlier best conversion of 1.25.
Data out of the UK has been limited to September’s trade balance figure, which has shown a deficit expansion from -3.77bn to -5.2bn.
The latest gains for the Pound have not been limited to against USD, with advances over 1% against risk-based currencies being seen due to widespread market uncertainty.