British Pound Has Plummeted - Here's What We’re Watching Next
Fundamental Forecast for Pound: Bearish
- British Pound matches most oversold condition since height of financial crisis
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The British Pound thundered lower versus the US Dollar, reaching its most oversold conditions since the height of the financial crisis. With such one-sided positions there’s substantial risk of a bounce, but great uncertainty in the weeks ahead warns against buying just yet.
A relatively empty economic calendar for both the UK and the US suggests that the Sterling might catch a break. Yet we’ll need to keep a close eye on official commentary ahead of the highly-anticipated Scottish referendum just two weeks away. At stake is whether Scotland remains in the United Kingdom. And a surge in two-week volatility prices warns of nervous trading conditions ahead.
The British currency could very well consolidate or bounce in the days ahead, but there remains clear risk of continued weakness. See the video for a full rundown of what we’re watching. - DR
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com David specializes in automated trading strategies. Find out more about our automated sentiment-based strategies on DailyFX PLUS.
Contact and follow David via Twitter: https://twitter.com/DRodriguezFX