Summer looks bleak for GBP
Bloomberg out with an article on the pound. They note Friday's sharp drop for the pound fuelled by the GDP miss as an ominous sign for the pound going forward. This latest data miss according to Bloomberg is evidence that Brexit negotiations have gone poorly and that the economy is starting to be impacted. They note a 'head on the sand' approach by the majority of the British population. Citing the ongoing difficulties with arranging an Irish border solution and the drop in expectations of a May hike they consider further GBP weakness ahead looks likely.
The data out of the UK has been poor over the last couple of weeks and , coupled with USD strength, the GBP has been steadily dropping. An outside engulfing bar on the weekly chart two weeks ago was followed by a further drop last week. On a swing trading basis GBP/USD shorts look good for the next couple of week. However, price is currently at supply roughly at 1.38000 to 1.3700, so a retrace should be favoured before considering a GBP/USD short.
