GBP/USD: Danske Bank believes that the pair will resume its decline and head for 1.43

Danske Bank believes that the GBP/USD could move towards 1.43 within the next 3 months.

"The GBP/USD has broken through 1.5300 for the first time since the beginning of March with the USD sell-off."

"Basically, we expect a return to the downward trend in the coming months, supported by rising US interest rates."

"In addition, we expect the market to incorporate a risk premium on the GBP before the 7 May UK election. In the last four elections, the GBP/USD fell during the 2 weeks preceding the election, and given the high degree of uncertainty about the outcome of the election, we believe it is fair to assume this will happen again this time too."

"Lastly, we note that according to the latest data from the IMM, speculative investors reduced their short GBP positions last week to the least bearish level since early March."

"Therefore, from a positioning standpoint, there should be plenty of room for GBP speculative selling. We are bearish on the GBP/USD and targeting 1.43 within three months."