GBP/USD Showing Signs Of Life After Bounce Back From 1.20-21
GBP/USD is showing signs of life after bouncing back from critical range of 1.20-21. This is important because of the uncertainty relating to terms and of course Brexit has already been factored in, especially after Theresea May’s speech last week. The parliament vote on the Brexit plan is certain now, which is likely to ensure that any plan detrimental to larger UK prospects shall not find support. The UK Supreme Court verdict confirming the parliament voting is also due tomorrow.
Technically, we see that GBP/USD has broken past the downward trend which has been in place since 14th Dec 2016 when GBP had tested 1.27+ mark. The unit is above 3 months moving average at 1.2398 and is likely to test 100days sma at 1.2526. Having said that, we do see some more period of consolidation (up to end Mar 2017) in 1.2350-2550 range before GBP/USD finally picks up any long term uptrend. Since the turnaround point in favor of GBP is still some time away, we continue with the strategy of hedging 60%-75% of confirmed GBP/INR exports.