GBP/USD: short-term technicals are bearish - Scotiabank

Analysts at Scotiabank explained that GBP’s surge against the USD yesterday represented the largest one-day gain for the pound since 1993 so it’s not too surprising that the GBP has slipped back somewhat, even with UK labour market data reports today providing some modest upside surprises, suggesting the underlying economic picture remains resilient. 

Key Quotes:

"Jobless claims fell 10.1k in Dec while average weekly earnings rose 2.8% in Nov. News that HSBC may move a significant portion of its banking staff to out of London underscores ongoing Brexit risks, however. 

GBP/USD short-term technicals: bearish – Sterling gains were spectacular yesterday but the short-term technical picture looks challenging for the pound; gains have stalled close to the early January high and the 40-day MA. 

Intraday price trends have turned negative, with the 6-hour chart showing a bearish “evening star” candle formation developing through the overnight session. Look for losses to extend towards 1.22 intraday."