GU moving in the channel. Should find support . Initiate a long at 1.2965 . Stop 1.2927 . TP 1.3100
My View Today, Sterling looks undervalued. Currencies for well developed economies tend to mean revert over long periods. For these economies, there are powerful forces that bring a currency back into balance after a selloff. The typical drivers of currency mean reversion now seem apparent for the U.K. If the law of mean reversion holds true, Sterling could get back to its long-term average in the coming years. Offsetting this view are several key factors, including a potential ‘hard Brexit’ that would severely impact trade between the U.K. and continental Europe. However, these impacts may be overstated, as some indicators suggest these risks have fallen.