Forex: pound will not be able to reverse the sale
In recent days, the dollar is weak because of declining fears of trade wars. Tension investors continued to subside after the EU summit-the USA in which Juncker and trump agreed on a plan to eliminate trade barriers. This increased pressure on the us dollar, which until recently fueled by flight from risks.
Against this background, more confident feeling the British pound which has the advantage of growing expectations of a rate hike by the Bank of England next week. According to the rates market, monetary policy tightening in early August, more than 80%. Another factor that plays into the hands of sterling, is the fact that Mei took the negotiations with the EU itself.
On the other hand, a rate hike is almost fully priced in. Risks associated with the “divorce process” is stored as the risk that the exit of London from Brussels will be no deal. Besides, there are prospects for further strengthening of the dollar on expectations of fed tightening and possible new attacks trump’s trade policy.
Thus, in the longer term, the GBPUSD is likely to continue to trade in line with the bearish trend. And profit-taking can begin on the fact of a rate hike by the Bank of England in a week. Accordingly, attempts to reach 1.33 and gain a foothold above that level with high probability it will fail because in a short time, sales growth will be relevant.
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