GBP/USD: Downside risks for the pound on domestic macro factors – MUFG

Analysts at MUFG Bank, see the GBP/USD with a bearish bias. They offer a trade idea of shorting the pair at 1.3080 with a target at 1.2800 and a stop loss at 1.3200. 

Key Quotes:

“We see building downside risks for the pound on domestic macro factors with the markets likely to price an increasing risk of BoE monetary easing going forward. With the broader sentiment on the US dollar likely to remain favourable we see scope for cable breaking below the 1.3000 level soon.”

“The rhetoric from BoE MPC members this week provides the catalyst for increased market pricing for a cut. Weak data next week, albeit for November prior to the election, will still add to speculation of easing potentially as soon as the meeting at the end of this month. Our current view is a cut at the May meeting, but risks of a January cut could build.”

“Technically, GBP/USD also looks poor with numerous breaches above the 1.3200 level failing quickly. The political rhetoric on EU-UK trade negotiations also point to a difficult time from the very start of negotiations later this quarter. Market participants will increasingly lose faith in the view of a bounce-back in UK domestic demand that will force the BoE to ease, probably not in January but by May.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Are you new to trading or have been trading for a while and you feel stuck?

Try with us!
Become Premium!

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD recovers within range, lacks follow-through

Encouraging macroeconomic data from the EU and the US boosted risked sentiment, which in turn, helped EUR/USD to advance, currently nearing the weekly high at 1.2075.


GBP/USD trades around 1.39 after a choppy reaction to the BOE

GBP/USD is trading around 1.39 after an 80-pip move around the BOE's "Super Thursday." The bank announced a slowdown in buying bonds but no change to the overall scope. US jobless claims and elections in Scotland are awaited. 


Gold Price Analysis: Gold bears seeking a correction to test bullish commitments

Gold has broken above the $1,800 mark, hitting the highest levels since February. The Confluence Detector is showing that XAU/USD has very few barriers through $1,850. Bears are lurking at resistance structure, eyeing a correction ahead of NFPs.

Gold News

Dogecoin price targets $1 as the chase for high-yielding cryptos accelerates

Dogecoin price strength combined with the complementary volume highlights the continued fascination in the digital token, portending further gains in the days ahead.

More Dogecoin News

US Nonfarm Payrolls April Preview: When the economy booms, its all about rates

The US labor market’s stars appear aligned for April.The economy is expanding rapidly, employers are confident and consumers eager to throw off the restraints of the past year.

Read more