Analysts at Scotiabank explained the circumstances around the pound.
Key Quotes:
“UK PMI data was a fair bit better than expected for Aug’s Services (54.3 vs. 53.9) and Composite (54.2 vs. 54.0) readings, suggesting a solid growth momentum in Q3, but the data had little traction with the pound in London trading.”
“Brexit concerns remain a broader drag on the pound’s outlook but today specifically, the GBP’s dip may be related to news that PM May will make a national security announcement in Parliament – possibly related to the novichok poisonings.”
“GBP/USD short-term technicals: bearish:
“Trend signals are aligned bearishly for the GBP which suggests that scope for Cable gains is limited and modest gains will draw out selling interest.”
“We expect firm resistance in the upper 1.28s. We see support at 1.2800.”
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