GBP/USD is clinging to the early gains while trading below 1.2650. Economists at ING expect the cable to advance nicely towards 1.2730/2770 in the week ahead. The GBP/USD bounce has certainly been slightly stronger than we thought (we had thought 1.2600/2650 would be the corrective top) and a slightly negative dollar environment at the start of this week could see GBP/USD extend to 1.2730/2770.
EUR/GBP to gravitate around 0.85 for a while
Long-term, we can still see GBP/USD heading back to the low 1.20s later this summer. EUR/GBP looks set to gravitate around 0.8500 for a while.