GBP/USD: Extension of Article 50 remains the highest probability, which may underpin GBP mildly - CitiBank

Matías Salord FXStreet

In their weekly strategy report, analysts at Citibank, point out that even with an extension of Article 50, hard Brexit risk is still there and they see that political uncertainty may continue to restrain the pound. Their forecast GBP/USD at 1.30 in a 0-3 month period and at 1.34 in 6-12 month.

Key Quotes:

"To us, extension of Article 50 remains the highest probability outcome, which may underpin GBP mildly. Importantly though, ‘no-deal’ remains the default legal position; hence a significantly large expected depreciation in this outcome remains probable. Also, General Election risk remains high. If a Corbyn-led Government looks likely, one could also expect a new low in GBP."

"Since the RSI has retreated to neutral levels, GBP/USD may range trade between 1.2898-1.3409"

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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