Below an outstanding Barcap report in which they run through the output from the latest data of their proprietary “quantitative analysis” expert system model.

Much of these models were originally developed the Lehmans Brothers teams in the US which Barcap have continued.

Their model highlights the under valuation of the EUR vs the GBP. Putting together with the more classical price technical work we saw from the Nomura and CS teams we see some clear threats to the gbp cyclical bull.

Fundamentally we know the issues all too well surrounding the GBP.

Importantly also note the over valuation of the euro vs Nok on their model. Over bought by 1.4 std. 2.4 std on market sentiment and 1.7 std over fair value. But if the euro is over valued vs the Nok and the euro is under valued vs the GBP. Then the std for the gbp vs the nok is therefore immense and my instinct tells me this is the illiquid alpha fx trade!

Here the superb report:

BARCAP-Wkly-FX-SuperTech-28-10-13

Rich

 

1 Star2 Stars3 Stars4 Stars5 Stars (3 votes, average: 5.00 out of 5)
Loading...