Serj Panchuk
The currently weak British Pound has had an insignificant influence on the competiveness of British companies, thus causing extra inflation pressure. According to Allan Monks, a currency strategist at JP Morgan, the weak domestic demand managed to outweigh the positive impact of the British currency weakness.
As British exporters keep increasing prices, the British export remains restrained. According to Allan Monks, the British export is dependent on the foreign demand rather than the British Pound exchange rate.
As for UBS exerts, they say the upward potential of GBPUSD is restrained. Weak inflation and retail sales reports hint at the likelihood further monetary easing. According to them, the justified price of GPUSD is currently around 1.53 and the currency pair has enough potential to go down to the level.
According to , GBPUSD has started recovering against the major downtrend. GBPUSD has finished sub-wave 3 or С inside wave А/В, a long-term downswing. At this point, the currency pair is forming sub-wave В(С) or 4 inside the given movement, which is restrained by 1.5903. A break above 1.5715 may initiate a rally up to 1.5756, 1.5837. A break below 1.5629 will resume the downtrend in the form of wave 5 or А inside the “hound of the Baskervilles” pattern by Elder/MF. If this is the case, 1.5601 will become the closest major level of support.
Serj Panchuk
