GBP/USD: Break below 1.2110 to open up the 1.20 mark – BBH

Sterling is underperforming despite better-than-expected data and is currently trading near 1.2125. The GBP/USD pair could tumble to the 1.20 level, economists at BBH report.

A recession is a foregone conclusion

“A break below 1.2110 would set up a test of the August 5 low near 1.20.”

“Q2 GDP came in at -0.1% QoQ vs. -0.2% expected and 0.8% in Q1, while the YoY rate came in at 2.9% vs. 2.8% expected and 8.7% in Q1. Looking at the monthly data, GDP came in at -0.6% m/m vs. -1.2% expected and a revised 0.4% (was 0.5%) in May. While the data were modestly better than expected, a recession is a foregone conclusion and the only questions are how long and how deep.”