The softer dollar allowed a decent reprieve to GBP/USD yesterday, but the move stalled before resistance at 1.2300. Economists at ING expect the pair to turn back lower towards 1.20.

EUR/GBP could edge back below 0.8400

“We think cable will struggle to get above the 1.23 level and would favour a return to the 1.20 area. We would have tight stops on short cable positions just above 1.2300, however.”

“A quiet August with benign conditions could see EUR/GBP edging back below 0.8400 – confounding the pound pessimists.”