Citibank (NYSE: C) said that investors should increase their holdings in the British pound, predicting a rally to an exchange rate of $1.57 after it closed yesterday at $1.52, citing technical indicators.
The Pound strengthened 1.2% to $1.5243 in New York on Wednesday, the largest one-day gain for the pound in five months. On March 1st, the Pound was exchanging as low as $1.4784 on March 1st on concerns that upcoming elections will result in a parliament that doesn’t have a political composition which can push through budget cuts.
“Further gains towards our 1.5700 target are on the cards,” technical analysts led by Tom Fitzpatrick in New York wrote in a note to Citibank clients. “We will therefore increase our long sterling-dollar position.”
The Pound last traded above Citibank’s target on February 17th, when the pound exchanged at $1.5816
Citi predicted correctly on March 10th that the pound would strengthen against the dollar after it rebounded from a support level. On that day, the pound hit $1.4873, near the $1.4879 level that Citibank predicted as a 76.4% Fibonacci retracement from the currency’s rally between March 1st and March 8th.
