The Pound Plunges into a Seesaw Battle

Recently the pound plunges into a seesaw battle, with increasingly improved economic data and people‘s concern that the terms about future relationship between the pound and the EU would harm the British’s prospect.

The pound‘s rebound trend in 2020 could be hindered by the BOE(Bank of England)’s forced stimulus measures in Economy.

Now GBP/USD hovers below 1.30, close to the lowest level this year. However, GBP/USD has limited downside, as the exchange rate is undervalued according to the level implied by the actual two-year swap spread between GBP and USD. If GBP/USD can support at 1.2800, the markets upside would be back again.

According to CFTCs latest report, speculative net longs of pound decreased by 7,233 to 17,689 contracts. Meanwhile, speculative longs reduced by 2,369 to 61,887 contracts, while speculative shorts increased by 4,864 to 44,198 contracts.

GBP/USD Daily Pivot Points: 1.2940-1.2960

S1: 1.2900 R1: 1.2980

S2: 1.2880 R2: 1.3020