GBP/USD: Outlook points to further upside – MUFG

Analysts at MUFG Bank, still see a trade idea of going long within the GBP/USD pair at 1.4175 with a target at 1.4585 and a stop loss at 1.3950. They see a positive outlook for the pound as a delay within the uk to the complete easing of the lockdown rules is unlikely to be meaningful. there’s a greater risk for the pound from EU-UK trade tensions consistent with them.

Key Quotes:
“We are maintaining our long cable trade idea as we still see the near-term prospects as positive for the pound. While there’s a danger that the Delta variant delays the complete reversal from lockdown, the high frequency data suggests a really strong rebound in economic activity is well underway anyway. Monthly GDP data for April showed a robust rebound because the UK economy re-opened while trade deals with Australia and Norway as close to be announced. albeit the last stage of the lockdown easing is delayed temporarily the economic impact should be limited. Market attention has also focused more on ongoing tensions between the EU and UK in implementing the Northern Ireland protocol, but again we don’t expect a cloth negative impact on the pound.”

 

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