HSBC analyst sees pound dropping towards 1.40 versus US dollar

HSBC saw the potential for a large move lower in the value of the pound against the US dollar.

In a research note sent to clients on Monday, the broker´s head of technical analysis, Murray Gunn, recommended clients 'short' the currency pair with a spot reference of 1.5180, targetting an initial target of 1.40 and that they set a stop-loss order at 1.5550.

"Much lower levels are possible," Gunn added.

"With measured Momentum turning down against the background of a bearish Elliott Wave cycle we open a short GBP-USD."