The outlook for sterling in the Boris Johnson years
After quickly hitting his target, our chartist predicts what will happen to the British pound next.
8th January 2020 08:46
by Alistair Strang from Trends and Targets
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After quickly hitting his target, our chartist predicts what will happen to the British pound next.
GBP:USD
Timeframes are not our thing, but still, our software is used to map important dates in the future. Thus, we know it's 67 days 'till the next Grand Prix, the dogs are 5.9 & 12.2 years old, wife's birthday is in 152 days, that sort of thing. But knowing when GBP:USD would precisely hit the $1.35 target given in our last report is curiously absent in the status bar of our program.
Our last diatribe relating to the pound/dollar pairing was given with the relationship at $1.292. It was to take just three weeks for the price to achieve our $1.35 target, only to fall back to its usual holding pattern within the next few weeks.
With 20:20 hindsight, the impetus for the share price jump was the Coronation of Boris, but we're increasingly concerned as to movements in the period since. Essentially, what had felt like strength is now doing a fair impersonation of a Flash in a Pan.
Source: Trends and Targets Past performance is not a guide to future performance
The relationship has certainly flopped around since the UK election, currently residing in a zone where weakness below $1.304 calculates with the potential of reversal to an initial $1.287.
While, visually, there's a strong argument for a bounce at such a level, we'd warn if $1.287 breaks, our secondary calculation is at $1.266. Unfortunately, this shall take the pairing firmly into the grasp of a longer term "bottom" at $1.230.
However, one aspect of this period of flailing around is the potential, should the pairing firm up above $1.33 as this should trigger strength to an initial $1.361. And, if exceeded, our secondary of $1.40 looks pretty logical.
Source: Trends and Targets Past performance is not a guide to future performance
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
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