Expert Sees More Weight on the Pound
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If you've been selling the British pound recently, congratulations. Expectations of more monetary easing and dismal economic reports have been weighing on the currency.
But if you're thinking it's time to step back, think again. This strategist says the pound's slide is not yet over.
"The steady fall in GBPUSD over the course of 2013 reached a significant milestone with the breach of 1.50 late last week," says Camilla Sutton, chief currency strategist at Scotiabank, adding that selling pressure on the currency remains intense.
Other technical indicators like the 21-day moving average and the moving average convergence/divergence are also in sell territory, Sutton says.
Want more reasons? Watch the economic reports coming from Britain this week. They "may provide for further downside, given expectations for a deterioration in industrial production and a widening in the trade deficit," Sutton says. And she expects investors to position for more easing by the Bank of England, with the incoming governor having said he wants to discuss ways to put more emphasis on pursuing growth.
As for levels, Sutton thinks there is upside resistance on the pound just below 1.5000 against the dollar.
That doesn't give buyers much room for hope anytime soon.
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