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14 Feb 2013
Forex: GBP/USD to 1.40 below 1.5220 - FXWW
Following a first article on the gloomy outlook of the Cable, in which Sean Lee, founder at FXWW, predicts the GBP/USD downtrend looks set to intensify should weekly support at 1.5250 give up, the analyst is out with additional views on the pair, saying that the sideways movement from the last 4 years may take the pair as low as 1.40.
"Chatter from the market suggests that both option and real money players are poorly positioned and if they have to start chasing it lower then it will fall vertically with levels back near 1.40 a possibility in coming months. Don’t try and bottom pick this pair, that’s my advice, or at least wait until the interbank panic starts to subside" Sean notes.
If cable is to fall off a cliff, then EUR/USD should follow suit to some small degree, Sean says, adding that the real beneficiaries would be the EUR/GBP longs, as the pair "may go through the roof" he notes.
"Chatter from the market suggests that both option and real money players are poorly positioned and if they have to start chasing it lower then it will fall vertically with levels back near 1.40 a possibility in coming months. Don’t try and bottom pick this pair, that’s my advice, or at least wait until the interbank panic starts to subside" Sean notes.
If cable is to fall off a cliff, then EUR/USD should follow suit to some small degree, Sean says, adding that the real beneficiaries would be the EUR/GBP longs, as the pair "may go through the roof" he notes.