Pound Too Strong

Analysts predict the British pound will fall against the dollar as the Bank of England prepares for a new governor.

The pound’s rally to a four-month high against the dollar is proving too much for currency traders unsure whether Mark Carney will step up stimulus efforts when he takes over as Bank of England (BOE) governor next month.

Sterling’s failure to extend its advance after rising above its 200-day moving average on June 13 may be a signal its winning streak is ending, according to Barclays Plc. The pound is also approaching a key Fibonacci retracement level where sell orders tend to be clustered, while the stochastic oscillator crossed a threshold that implies an imminent reversal.

Relative Strength

The pound rose as high as $1.5752 on June 17, 0.2 percent from the $1.5789 resistance level that represents its 61.8 percent retracement of this year’s high and low based on a Fibonacci chart, data compiled by Bloomberg show.

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