EUR/USD zeroing in on 1.10, GBP/USD should follow with a break above 1.25 – ING
|The Pound is set to be the best-performing currency of the first quarter of 2023, having gained 2.5% against the Dollar. Economists at ING think EUR/USD may break 1.10 next week. If that is the case, Cable should follow with a break above 1.25.
No reasons to diverge from EUR
“We have been stressing how markets are rewarding currencies that can count on domestic tightening prospects despite financial turmoil, and the Pound is indeed one of those.”
“While our more dovish view for the BoE compared to the ECB keeps us bullish on EUR/GBP for the remainder of the year (we still target 0.90 in the second half of the year), there aren’t clear short-term drivers to buck the bullish GBP trend at the moment.”
“Cable is approaching some important levels. First of all, the 1.2426 December 2022 high, and then the key 1.2500 benchmark level. With no obvious catalyst driving divergence between EUR and GBP at the moment, a high chance of 1.1000 being tested next week in EUR/USD equals a high chance of 1.2500 being tested next week in Cable.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.