Cable is down 30 pips to start the week
MUFG is behind the eight ball on their trade of the week this week. Or you can look at it another way and say that it's on sale right now.
They recommend buying GBP/USD with a target of 1.4125 and a stop at 1.3425.
"We are recommending a long cable trade idea. The GBP currently has strong upward momentum against both the EUR and USD. We expect the GBP's bullish momentum to extend further in the near-term," MUFG notes.
"The main hurdle to our bullish outlook is posed by next week's BOE policy meeting. On balance, we expect the BOE to decide against lowering rates next week and refrain from providing a stronger signal over the likelihood of negative rates being implemented anytime soon," MUFG writes.
