GBP/USD: Volatility ahead but range to hold - Lloyds Bank

Analysts from Lloyds Bank, point out that with major even risks approaching (FOMC and referendum) volatility in the GBP/USD pair is likely to remain high but they expect the 1.40 - 1.48 range to hold.

Key Quotes:

“With major event risk approaching, including June’s US FOMC meeting and the UK’s EU referendum, GBP/USD volatility is likely to remain elevated, although we expect the 1.40 – 1.48 recent range to hold."

“GBP/USD is currently being heavily influenced by three key uncertainties: the market pricing of US policy rate expectations (primarily the FOMC meeting in June); the UK’s domestic economic outlook; and the outcome of the EU referendum (23rd June). Having held important support at 1.40 in early April, GBP/USD appreciated towards 1.48 (close to its year-to-date high)”

“We forecast GBP/USD to move towards 1.47 in June, and 1.52 by end-2016.”