GBP/USD: Pound had become one of the most undervalued currencies according to valuation models – MUFG


Recent price action and positioning challenges the negative sentiment around the British pound, explained currency analysts at MUFG Bank. 

Key Quotes:

“The pound has been one of the best performing currencies over the past week which has helped to lift cable back towards the 200-day moving average at close to the 1.2700-level. Better price action in the near-term marks a reversal for the pound after it was the worst performing G10 currency in May and June. It now remains to be seen whether cable can extend its advance beyond the 200-day moving average which has capped upside since the COVID crisis struck in March.”

“In a further bullish technical development, EUR/GBP has fallen back below the 0.9000-level which has provided strong resistance since the Brexit referendum in 2016. In the absence of clear fundamental drivers behind the pound’s recent rebound, it may reflect more a correction of overly pessimistic pound sentiment and positioning. The pound had become one of the most undervalued currencies according to valuation models.”
 

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

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD: Upside stalls below 1.1700 as US dollar attempts a comeback

EUR/USD is consolidating the recent corrective advance towards 1.1700, as the US dollar attempts a comeback across the board, despite the risk-on market mood. Eurozone/ US Consumer Confidence data, Fedspeak in focus ahead of the first US Presidential election debate.

EUR/USD News

GBP/USD eyes 1.2900, Brexit brinkmanship, BOE’s Bailey in the spotlight

GBP/USD keeps buyers hopeful, despite the US dollar’s recent recoveries while holding gains above 1.2850. The cable extends gains, mainly driven by the Brexit-positive headlines but stays challenged ahead of the crucial departure talks in Brussels.

GBP/USD News

Gold looks north, two key levels to watch out

Gold started out the US NFP week on a solid footing, rallying nearly $20 on Monday. The metal bounced-off the SMA100 one-day support for the third straight day, courtesy of the broad retreat in the USD from two-month peaks.

Gold News

US CB Consumer Confidence Preview:  Neither happy nor sad

American consumer attitudes have recovered from their April pandemic low but they remain stalled far below their levels of last year. The Conference Board (CB) Consumer Confidence Index is predicted to rise to 89.2 in September.

Read more

WTI slips below $40.50 amid US dollar recovery, API data eyed

WTI refreshed the intraday low after reversing from $40.79. US dollar regains upside momentum amid hopes of further stimulus. Challenges to the US-China trade deal add downside pressure on oil prices. API data, USD moves become the key amid a light calendar.

Oil News

Forex MAJORS

Cryptocurrencies

Signatures