GBP: Potential For A Tactical Rebound; Where To Target? – Morgan Stanley

We maintain the view that GBPUSD could tactically rebound to 1.30/1.31 going into year-end.

With the BoE maintaining its neutral stance, coupled with recent UK data such as CPI and retail sales holding up well, the downside in GBP is likely to be capped. GBP also has a high 'hard Brexit' risk premium priced in, and with recent news indicating that this risk is lessening, there is potential for some 'hard Brexit' discount to be priced out.

We remain short EUR/GBP.*

*Morgan Stanley maintains a short EUR/GBP position in its portfolio targeting 0.7900, with a stop at 0.6800.

**This trade is recorded in eFXplus Orders.

Copyright © 2016 Morgan Stanley, eFXnewsOriginal Article