From the FXWW Chatroom: Citi: – As GBPUSD continues to slide we refresh the chart and find the price action to be quite similar to December-January when the pair fell 8 big figures in 30 sessions.
– Granted, the end of last year saw general USD strength. This time the USD has only just started to rebound over the past week, though there are signs emerging that a decent turn is taking place broadly and a USD rally could last for some time (more on that in the upcoming Weekly Roundup)
– Let us also remember this is not just about the USD. It is clear the Bank of England is unlikely to budge in the face of much uncertainty surrounding Brexit. Contrary to earlier expectations, it is the UK, and not Europe, that now seems divided or fragile. Just look at the situation today – the Queen’s Speech for the official State Opening of Parliament is to be delivered behind schedule and without a coalition in place but instead a minority government i.e. still a hung parliament.
– If the same 8 figures were to repeat at the same pace, we would be at 1.2250 by the end of next week. Even if we do not make it there that soon, the chart still suggests we will get to those levels and probably even lower over time.
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