GBP gains limited? – Danske Bank
|Senior Analyst at Danske Bank Morten Helt hinted at the possibility that further gains in the Sterling could be limited.
Key Quotes
“In the majors, GBP strengthened in an otherwise uneventful day as the House of Lords began debating the UK government’s Brexit bill”.
“According to our short-term financial models, EUR/GBP is significantly oversold and GBP/USD is overbought, suggesting that GBP strengthening potential should be limited short term”.
“We still expect EUR/GBP to trade higher as Brexit moves closer, targeting the cross at 0.87 in 1-3M. However, the Brexit bill might not pass the House of Lords in the first attempt unless the members break with their usual practice of allowing government legislation through unopposed at this stage. Hence, short-term risks to EUR/GBP (two to three days) are probably relatively symmetrical”.
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