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GBP/USD Close to Retracing 50% of Thursday Downleg

GBP
  • GBP/USD recovery and bounce continues to take shape on an intraday basis, with spot now over a point off the overnight lows. Today's high crosses almost exactly at the 50% retracement of yesterday's down-move, and strength through here and a close above would turn focus to 1.2996 and the 1.30 handle and the best levels since Jul 19.
  • Volumes across currency futures have been solid as spot recovered off lows, with cumulative activity so far well ahead of average for this time of day.
  • EUR/GBP's slip back below the 50-dma also confirms the recent rally in the cross as corrective, opening a leg lower in the cross to 0.8504 (Jul 11 low) which further improves the S/T GBP outlook.
  • BoE decision understandably in focus, with markets currently favouring a 25bps step from the MPC next week, although outside pricing remains for a larger 50bps hike. Our full BoE preview will be out early next week.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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