GBP: Consolidation is the most likely near-term scenario - BBH

Research Team at BBH, notes that the Sterling collapsed before the weekend but managed to recover toward $1.25. 

Key Quotes

“After losing 1.25% in the month of September, sterling depreciated by 4% last week,  The risks of a hard exit from the EU, which has come to mean the lack of free access to the single market in exchange for more controls over immigration, have risen, but that does not explain what was as much as a 10% move in few minutes. 

The drop was not as large as the one that took place in the immediate response to the referendum, but there are few precedents of such a large move without a clear precipitating factor. Our usual technical tools may be of little help, but we suspect consolidation is the most likely near-term scenario.  The new range may be $1.23-$1.26 for next week.” 

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