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Forex Flash: What to do with GBP/USD? – Commerzbank, UBS and RBS

FXstreet.com (Barcelona) - The sterling is trading in a better mood on Tuesday in the wake of higher CPI figures in the British economy during February. The pound climbed from the area around 1.5075 to the boundaries of 1.5140 soon after the release, ahead of the BoE Inflation Letter due later.
Despite the recent improvement in the price action, the three following analysts coincide in the longer-term direction of the cross: south.

Karen Jones, Head of FICC Technical Analysis at the German lender Commerzbank, keeps the bearish tone on the cross, arguing, “We believe that the longer term down move has further to run and view last week’s advance as a short term correction only. Longer term we look for losses to 1.4229, the 2010 low”.

In the same line, Strategists G.Yu and G.Berry at UBS, affirm the bank’s bearish stance on GBP/USD, suggesting, “The recent recovery does not change the broader bearish picture. Important resistance is at 1.5199. Support is at 1.5004 ahead of 1.4832”.

“We expect the budget to underwhelm this week and the BoE to remain skewed towards a more dovish stance, this should keep the theme of GBP debasement on the market’s minds. Hence, GBP is likely to find it hard to move closer to fair value estimates”, explains Melinda Burguess, FX Trading Strategist at RBS.

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