The outlook for sterling in the Boris Johnson years

by Alistair Strang from Trends and Targets |

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.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang, Shareprice, or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea. 

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation, and is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

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