Pound slips after bounce from the lows of the year
The rebound in the pound since the start of September is in danger of falling flat unless there is some fresh door opened by EU negotiators, SocGen argues today.
“The pound will look to extend this month’s stellar run this week, but we suspect the bar may be too high for GBP/USD to lurch towards 1.2737 (200dma) without a nod from the EU on the UK backstop alternatives,” they write.
They note that technicals are overbought in the short-run and there might be more pressure on longs to take profit.
You can see the in the recent past the 200-dma hasn’t always been a decisive line in the sand but I think in this instance it’s the proper barometer of how Brexit negotiations are really going.