BoE To Maintain A Dovish Stance; GBP Not Oversold Yet

The pound dropped quite sharply in a belated reaction to the end of the legal process. Brexit is in the hands of Theresa May now. What’s next? The next risk event is the BOE.

Here is their view, courtesy of eFXnews:

Credit Agricole CIB Research expects the BoE to stay on the dovish side this week linking its dovish policy stance to Brexit related long-term uncertainty.

With regard to positioning, CACIB data continues to suggest that ‘investors run a relatively balanced position, which indicates that current GBP levels should not be treated as oversold.’

As such, CACIB argues that further GBP downside risks cannot be excluded in the short-term.

GBP/USD is trading circa 1.2139 as of writing.