GBP/USD: Real Money Positioning Is Yet To Shift Bullish; Where To Target? - Nomura

Nomura FX Strategy Research discusses GBP outlook, noticing that the currency has outperformed this week, with the news that a number for the UK’s divorce bill has been agreed.
"...The market which we have argued has been too pessimistic on the Brexit negotiations for the past month or two is now seeing that real progress is being made. There are also reasons to be more optimistic on the UK banking sector outlook.
We expect a grind higher in GBP pairs, with EUR/GBP down to 0.87 our first target.
The US tax reform progress makes GBP/USD a trickier pair to forecast, but real money positioning is yet to shift and so we expect a further unwinding of positions that could take the pair to 1.40 by 2018," Nomura argues.