GBP/USD: Let Some Air Come Out From The GBP Balloon

The outlook for the Pound looks quite bright. The move in the Pound has been by far the most aggressive in the last 24h, which puts us in a difficult position to find good opportunities to engage in buy-side action unless your strategy is based upon momentum or some type of scalping that gets you in and out of the market fairly quickly. The reason I am saying that is because we are quite overstretched by any measure you deploy. We’ve run over 300 pips to the upside in just 3 days, so with such an average of 100p/day, it’s difficult to find value. The technicals and intermaket flows are definitely in alignment for further upside, but I personally think that some air must first come out of the GBP balloon before considering to buy and hold strategies. Anything can happen, and the combination of positive Brexit headlines alongside the Yuan strength story dragging on can further expand the momentum, but when all things considered, this market needs some type of correction before the risk-reward becomes relatively attractive. Just my 2 cents.