Analysts at Scotiabank explained that this week’s domestic risks are limited ahead of Friday’s final Q2 GDP release, and sentiment is set to remain dominant as market participants assess the ongoing barrage of Brexit-related headlines.
"Measures of implied GBP volatility are climbing, and risk reversals are steadily pricing a greater premium for protection against GBP weakness. Remain bearish."
"DMI’s are providing confirmation and short-term MA’s are bearishly aligned. The 9 day MA has provided near-term resistance and GBP risks breaking through Friday’s low to levels last seen in mid-August."
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