GBP steadily moving higher - BBH

Sterling continues to march steadily higher after it closed below $1.40 for the first time in several weeks on April 5, but sellers on the breakout were quickly burned, explains the research team at BBH. 

Key Quotes

“Sterling has not looked back.  Before the weekend it reached its best level since the post-referendum high was set on January 25 (~$1.4345).  The high posted on the day of the referendum was around $1.50.  The euro slid to its lowest level since last May against sterling (~GBP0.8630).  However, it appeared over-extended and closed below its lower Bollinger Band for the past two sessions. The pre-weekend price action also may be a potential (euro) bullish hammer.  The GBP0.8700 area may at least initially cap a euro recovery.”

“In contrast to the eurozone, the British economic data have surprised on the upside consistently in recent weeks.  This has underscored the market's confidence that the BOE will hike rates next month.  Investors lean toward another hike in Q4.  At the same time, the UK's confrontation with Russia, which also pushed Brexit off center stage, has reduced the risk of a political crisis after next month's local elections.”

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