Technical outlook weighing on GBP/USD as a break below bear flag support and multiple H&S downside breakouts on weekly charts suggest the sterling may not regain its luster vs. USD in the long term.
Fundamentally, higher Fed Funds rate and a widening interest rate differential on the back of a US FED beginning to walk the walk of tighter monetary policy lays down the brickwork for a firmer greenback across the board.
This is not an overnight trade, more-so a Soros like short position and is likely to play out in the following quarters but does offer positive risk:reward value if limit entries are met at 1.36 figure and 1.3750 respective for half of a short position each. Stops above the 1.4100 figure with take profits targeting the measured move objective of the bear flag breakout at the 1.10 and 1.05 figures provides a longer term opportunity with potential positive risk:reward value of 9 to 1.
Fundamentally, higher Fed Funds rate and a widening interest rate differential on the back of a US FED beginning to walk the walk of tighter monetary policy lays down the brickwork for a firmer greenback across the board.
This is not an overnight trade, more-so a Soros like short position and is likely to play out in the following quarters but does offer positive risk:reward value if limit entries are met at 1.36 figure and 1.3750 respective for half of a short position each. Stops above the 1.4100 figure with take profits targeting the measured move objective of the bear flag breakout at the 1.10 and 1.05 figures provides a longer term opportunity with potential positive risk:reward value of 9 to 1.