GBP/USD: neutral to bearish with strong resistance at 1.3250 - Scotiabank

Shaun Osborne, Strategist at Scotiabank noted that GBP/USD technical perspective is neutral to bearish with strong resistance seen at 1.3250.

Key Quotes

“Sterling is out-performing this morning, helping nudge EURGBP below 0.85. The market is responding to better than expected Gfk consumer confidence data for August (still weak at -7 but better than July’s -12 and better than consensus calls) as well as firmer UK house prices (+0.6% in the August month, according to the “Nationwide’s” survey – versus calls for a 0.2% drop).”

“The news was not all positive, however. The Lloyds business barometer dipped again in August (16, from July’s 29). PMI data due over the next week will be closely watched for clues on activity post-Brexit.”

“GBPUSD short-term technicals: neutral/bearish—Despite the relatively steady performance in spot, there is really little to cheer about on the charts for the GBP. At beast, the GBP is consolidating within a well-defined triangular pattern; these are typically continuation patterns (bearish, in this case).”

“We see strong resistance at 1.3250 still overall and would not get too excited about upside GBP prospects unless or until the market moved well above 1.35 at this point. We think the underlying risks continue to tilt lower. Key short-term support stands at 1.3065 intraday but may not be really at risk until later in the week.”