It's Time to Sell Those Dollars says Morgan Stanley

The Dollar is close to topping out and will not reach meaningful new highs, according to analysts at Morgan Stanley, who are telling the bank's clients to begin selling the U.S. currency. 

The Pound-to-Dollar exchange rate is forecast to maintain familiar levels over coming days but ln the case of a downside break - confirmed by a move below 1.2600 - we might expect a follow-through down to a target at 1.2310.

The U.S. Dollar appeared to shrug Wednesday when official data revealed that U.S. inflation pressures remained elevated during October, although recent developments in oil markets mean the outlook for price pressures has cooled of late.

From a technical perspective, there is evidence a recent uptrend in GBP/USD may have rotated lower after pulling back down below the 50-day moving average, which is in itself a bearish sign.

The U.S. Dollar rally extended ahead of the weekend thanks to a better-than-forecast PPI number out of the U.S.

The Dollar is likely to correct downwards against a basket of currencies before year-end, according to technical analysts at Bank of America Merrill Lynch, who've warned the U.S. currency could be in for "much more pain" if a key level of support gives way over the coming months. 

"GBP/USD looks mostly neutral in short term," say brokers XM.

The Dollar extended its rebound from an earlier election-induced slump Thursday after the Federal Reserve (Fed) signalled that it will continue with its plan to raise U.S. interest rates during the months ahead.