JP Morgan: We stay bearish on Pound, despite the Brexit Breakthroughs

Although the pound has enjoyed extraordinary growth in recent weeks and almost complete recovery from Brexit decision, JP is of the opinion that the outlook for the island is negative. According to the bank, weak economic data from the UK will put pressure on the pound.

Currently, GBP receives support from Bank Of England, as the institution responds quickly to rising inflation with a sharp change in monetary policy and raising the base rate.

JP's opinion among other Wall Street leaders differs dramatically, as most banks believe GBP will continue to climb even at the beginning of the year. For comparison, the average Q1 end estimate is at a price of 1,3300 GBP/USD, and the expectations of J.P. are priced at 1.3000.

What to expect?
Given the current strong momentum and price of 1.3800, JP's forecasts seem increasingly unreal. Our expectations are the price to correct, but to maintain the upward trend. The area around 1.3600 is key and gives a good opportunity to add long to the trend. When we break down, we expect a test at the next, stronger area around 1.3450.

Source: Bloomberg Pro Terminal

Jr Trader Petar Milanov

Bloomberg: JPMorgan Stays Bearish on Pound Even Amid Brexit Breakthroughs

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