VOT Research Desk
GBP/USD varies under 1.2100. According to ING economists, the possibility of a recession will keep the Pound Sterling under pressure.
Prices for the three-month GBP/USD trading volatility are currently around 12% after being close to 19% in late September.
While recession expectations are becoming more certain, it is clear that Sterling trade conditions have improved.
These GBP/USD gains, in our opinion, won’t persist, and we wouldn’t be shocked to see new selling activity develop at the 200-Day Moving
Average at 1.2177 or, at the very least, the 50% retracement of the 2021–22 decline, which is at 1.2300. For a change, the recent inversion of yield curves around the globe does appear to be a predictor of impending recession.
The vulnerability of the pound should also be anticipated given its significant current account deficit.
