Pound Enters Make-or-Break Mode as Key Technical Levels Tested
- Euro orbits $1.12 handle as FOMC begins two-day meeting
- Swedish krona leads gains over dollar on faster inflation
UBS' Smiles Is Underweight U.K. Equities
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As dust from the U.K. elections started to settle, the pound found support from model accounts as the lows seen on the immediate aftermath of the vote have yet to be breached.
Sterling has once again rebounded after visiting $1.2630-40 area, forming a triple bottom on the daily charts. Real-money names were also seen on the bid, according to Europe-based traders. Given these accounts have a long-term horizon in mind and tend to stay sidelined amid political woes, this demand could represent squaring of shorts. CFTC positioning shows that for the week ended June 6, pound shorts among asset managers and institutional investors were close to their lowest levels since October 2015.