Ever heard of the Big Mac Index?
According to Burgernomics the GBP is undervalued to the tune of 23.2%. If you have never come cross Burgernomics it is based on the Big Mac Index which is run by The Economist since 1986. According to The Economist it is:
It is based on the theory of purchasing-power parity (PPP), the notion that in the long run exchange rates should move towards the rate that would equalise the prices of an identical basket of goods and services (in this case, a burger) in any two countries.
You can check out the main site here and if you want to check out the source data you can do so here.
Although the Big Mac Index is a little light relief. The case for the GBP to return to higher levels against the USD longer term is compelling once the Brexit saga has ended. However, I can't find a place to enter where I can meaningfully limit my risk, so I remain a seller on rallies over the shorter intraday timeframes. A rejection of the pivot point on the 1 hour chart at the 1.2600 region. could be an excellent are to short from down towards S1 at 1.2450.
