Long GBPUSD and short EURGBP - BNPP

Research Team at BNP Paribas, suggests that the focus this week will remain on any Brexit-related political developments which is likely to have impact on GBP crosses.

Key Quotes

“On Thursday, the UK High Court will hear testimonies arguing that the government has a duty to get parliamentary approval before triggering Article 50. The case is expected to conclude on 18 October. BNP Paribas STEER™ initiated long GBPUSD and short EURGBP signals Monday.  According to the relationships captured by the model, the sell-off in the GBP has been too aggressive relative to price action in other asset markets following UK Prime Minister Theresa May’s speech 2 October.

Elsewhere, more European Central Bank members are scheduled to speak over the coming days, including: Mersch, Weidmann, Coeure and Draghi. Our economists think their tone will remain dovish ahead of the ECB policy meeting on 20 October.”