British Pound: Weekly reversal targets range highs against US Dollar – Scotiabank

Scotiabank strategists Shaun Osborne and Eric Theoret note GBP/USD is little changed as markets await UK labour data, Consumer Price Index (CPI) and next week’s budget, where investors expect Chancellor Healey to maintain fiscal discipline. Technically, the British Pound (GBP) has staged a strong bullish weekly reversal from the lower end of its sideways range, with scope to retest 1.3650/75 and initial resistance at the 200-day moving average near 1.3435.

Pound eyes retest of range top

"The GBP is little changed on the session. Spot is marking time ahead of tomorrow’s jobs and wage, with CPI released on Wednesday."

"Next week’s budget is starting to attract a little attention as well, with local reports suggesting that investors are banking on Chancellor Healey maintaining a steady hand on spending and borrowing to boost Gilts."

"Bullish – Solid GBP gains from Wednesday’s post-US CPI low drove a huge bullish weekly reversal on the chart (outside range week)."

"Follow through demand so far has been limited but the scale of last week’s rebound from the weekly low and net gain is hard to ignore."

"With recent price action basing around the low point of the sideways range in place since April, the pound’s solid gain last week should put spot on course to retest the upper end of the range (1.3650/75) in the coming weeks."

"Initial, key resistance sits at 1.3435 (200-day MA)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)