MNI BRIEF: Italian Business See Prices At 1.5% In 2025 -BOI

MNI China Daily Summary: Tuesday, January 14

MNI NBP WATCH: Rate Hold Seen After Governor's Hawkish Tilt

MNI BRIEF: PBOC To Ensure Yuan Stable, Ease For Economy: Xuan

MNI BRIEF: China Yields Will Reflect Fundamentals - PBOC

EZ/UK T-Bill Calendar: 12-Month BT Auction on Wednesday

EZ/UK Bond Supply Calendar: UK, Germany Auction on Wednesday

MNI: US DEC TREASURY BUDGET -$86.7B

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

© 1982-2025 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

GBP/USD Puts Pair at Most Overbought in Over Two Years

GBP
  • The winning streak in GBP/USD extends to six consecutive sessions, with spot convincingly clearing 1.30 to put prices at the best levels since April last year - opening next levels of resistance at the Apr21 high of 1.3090 and the 1.00 projection of the May 25 - Jun 16 - Jun 29 price swing.
  • On a technical basis, the GBP/USD run higher is now comfortably overbought. The 14d RSI has been boosted to 75, making the pair the most overbought since Feb'21 - where GBP/USD underwent a sharp rally from ~1.37 to ~1.42 - as the currency benefited from fading expectations of BoE NIRP as well as government planning for an end to COVID lockdowns. Back then, the subsequent unwind of the overbought condition saw the pair shed 4% over the next calendar month.
  • A similar response this cycle would see the pair return to test support at the 50-dma of 1.2609 - a move that would likely have to be predicated by a significant downward repricing of Bank of England rate hike expectations - the peak rate remains above 6.00% in OIS terms, although has moderated considerably (over 50bps) off the cycle highs pre-nonfarm payrolls last week.
  • This week's spot rally has forced markets to significantly mark up the implied odds of further GBP/USD strength into year-end. Options markets now imply a 25.6% chance of spot above 1.35 by year-end (and 8.3% above 1.40), up from 13.2% and 3.9% this time last week.
Homepagemarkets-real-timeBulletMarketsFixed Income BulletsForeign Exchange Bullets

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.