The Pound rebounded in April as risk sentiment persevered and investors were looking for laggards. The GBP/USD was particularly strong given the broad-based weakening of the greenback.
However recent UK data were poor with retail sales, Manufacturing and Services PMI all under-delivering. Thursday’s quarterly inflation report and BOE is unlikely to bring any positive news for the Pound with the referendum around the corner.
The main reasons for the GBP to hold ground is the USD weakness and risk appetite. Both seem in jeopardy with the rising inflation expectations, weaker NFP, and low corporate profits. As we approach the referendum in June 23th, risk premium for the Sterling should also rise.
Sell at 1.4480, stop 1.4615, Target 1.43 & 1.41