We think GBPUSD is likely to come under increasing downward pressure as investors sharpen their focus on pronounced UK political uncertainty in an environment of broad USD strength.
• Greater sensitivity to rising implied volatility and relative BoE-Fed monetary policy should also weigh on GBPUSD, in our view.
• Consistent with our technical strategist’s bearish GBPUSD view, we recommend selling GBPUSD spot (reference: 1.4902) targeting 1.4050, above important technical support, with a stop loss at 1.5180, above recent range highs.
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