Scotiabank’s Shaun Osborne and Eric Theoret note GBP/USD is slightly higher, British Pound (GBP) outperforming most G10 peers except the Canadian Dollar (CAD) and Norwegian Krone (NOK), as traders await UK trade and industrial production data before the June 18 BoE meeting. They- see stalled rate expectations and stable yield spreads, with near-term resistance around key moving averages and a 1.3350–1.3450 trading range amid elevated domestic political risk.

Sterling edges up into key UK data

"The pound is also entering Wednesday’s NA session with a fractional 0.1% gain as it outperforms all of the G10 currencies with the exception of the CAD and NOK."

"Fundamental releases have been limited and all eyes are on Friday’s trade and industrial production figures, some of the last major data points scheduled ahead of the June 18 BoE meeting."

"The recent recovery in rate expectations looks to have stalled, and yield spreads have stabilized, offering little in terms of near-term directional risk (fundamentally) for the GBP."

"Sentiment has deteriorated somewhat over the past week or so, and political risk is elevated into the June 18 by-election for potential Labour leader Andy Burnham’s constituency. "

"Near-term gains may find resistance around the 200 day MA at 1.3420 and above the 50 day MA at 1.3461. We look to a near-term range bound between 1.3350 and 1.3450."

"Bearish/neutral – the RSI has once again come off its lows and is once again returning to the neutral threshold at 50. Recent price action has offered a potential ‘morning star’ reversal candle formed by Friday’s decline, Monday’s doji, and Tuesday’s solid up day."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)