GBP/USD further gains needs to surpass 1.2815 – Scotiabank

FX Strategists at Scotiabank stay neutral/bearish on Cable in the near term.

Key Quotes

“A year on from the Brexit referendum, GBP prospects are little clearer. On the one hand, the government is still trying to shore up parliamentary support after the disastrous election just as Brexit talks are starting. On the other, today’s CBI survey data suggests that factory order books are at a 30-year high, reflecting strength across most sectors and for exports. A weak GBP is helping here—something BoE policy makers will have to balance as some fret about rising inflation”.

“Short-term trends are flat between support at 1.2635 and resistance at 1.2705.

Intraday gains from the 1.26 area yesterday may have propped up the broader trend for now and put an important, short-term marker in at 1.2590/00. We think Cable needs to break above 1.2815 to extend gains meaningfully”.