GBP/USD: Recovery holds with upside targets – Scotiabank
Scotiabank strategists Shaun Osborne and Eric Theoret report that the Pound (GBP) is consolidating Wednesday’s strong rebound versus the US Dollar (USD), with domestic risk limited ahead of upcoming Bank of England (BoE) speeches and data. They see fundamentals and sentiment as supportive of GBP strength, with resistance noted above 1.3480 and upside technical targets at 1.35 and 1.3580 within a 1.3350–1.3450 near-term range.
Pound supported by improving sentiment
"The pound is up a fractional 0.1% vs. the USD with a modest gain that suggests consolidation following Wednesday’s impressive recovery rally."
"As with EUR, we see this week’s price action as a clear reflection of the geopolitical risk premium that is currently weighing on the pound, and an indication of the direction of travel if/when the market tone maintains its overall improvement."
"Fundamentals remain supportive of GBP strength and measures of sentiment confirm the fade in concerns about downside risk."
"Neutral/bullish – the RSI has pushed into bullish territory following a break above the neutral threshold at 50."
"The GBP did reach a fresh – albeit marginal – one month high in the upper 1.34s, however recent price action suggests material resistance above the 1.3480 level. With both the 50 and 200 day MA’s (1.3439 and 1.3414, respectively) broken, we now look to 1.35 and 1.3580 as the next major upside targets. We look to a near-term range bound between 1.3350 and 1.3450."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
