GBP/USD bearish tone prevails - Scotiabank

GBP/USD short-term technicals remain bearish, according to Shaun Osborne, Chief FX Strategist at Scotiabank, with the key 1.4335 support area at risk. Uncertainty about a potential “Brexit” keep investors wary ahead of the Jun 23 UK referendum.

Key Quotes

“The UK reported mixed news overnight, although the primary focus for markets remains on the looming referendum. UK trade data reflected a smaller deficit on better exports while the RICS House Price index plunged from 35 to 19, warning of the potential for a sharp tumble in home prices ahead. A report also suggested that referendum uncertainties have prompted employers to hit the pause button on hiring.”

“GBPUSD short-term technicals: bearish—Intraday charts suggest Cable is finding good support on dips to the mid 1.44 area so far today with Cable essentially fighting a hearts and minds campaign around the 40-day MA (1.4490). The broader picture still tilts somewhat bearishly, however, with the market well-capped above 1.47 recently and key daily support at 1.4335 at risk. We favour selling rallies.”