GBP outperforms modestly – Scotiabank

The Pound Sterling (GBP) is a moderate outperformer on the session, holding fairly comfortably in the mid-1.27s versus the USD, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

EUR/GBP weakens on the day

“The BoE’s slow-moving policy adjustment process is driving spreads wider in the GBP’s favour against the EUR, with the cross trading at its lowest since 2022 after breaking out of a 1-month consolidation range which formed around 0.83. The GBP retains a somewhat positive technical undertone against the USD on the intraday chart, with Cable holding a sideways consolidation range around the 1.2750 area.”

“But the 200-day MA (1.2822) remains a block on gains and the USD retains a fair degree of residual bull momentum on the daily and weekly charts which will limit the pound’s ability to strengthen for now at least. EUR/GBP is bearish.”

“The cross has broken out on the downside of its recent consolidation range, trend strength oscillators are aligned bearishly across short-, medium– and long-term studies and there is nothing in the way of a test of major support at 0.82. The cross has not traded below this point since Brexit. A push below here would be very significant from a technical point of view I believe.”