Pound Eyes Chart Breakout Against Franc as BOE Shifts Momentum
- Sterling bounces off bottom of four-month chart pattern
- Momentum indicators, short positioning favor potential gains
BOE May Make Smaller Adjustments, Says RBC's Lignos
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The pound’s rally on a more hawkish tone from the Bank of England has led to a turnaround in technical momentum indicators, which suggest it could break out from a four-month range against the Swiss franc.
The pound last week bounced off the bottom of a triangle chart pattern in place since November against the Swiss currency. The change in sentiment comes as the Bank of England’s minutes last week shifted market expectations toward tighter policy in the U.K. while traders are still short on the pound, signaling the potential for more short-covering.