In opinion of FX Strategists at Scotiabank, Cable’s near term outlook remains neutral/bearish with the likeliness of another test of the mid-1.2900s.
Key Quotes
“UK data revealed steady unemployment (4.0%) and a further pick up in wages, with weekly earnings ex-bonus payments reaching +2.9% in the Jul year. The Treasury also announced that BoE Gov. Carney would be remaining in position for a period beyond the expiration of his term next year to help see the economy though the Brexit process. Markets seem less than enthused. Sterling has found support from an improvement in the market’s mood around Brexit but we still think there are some significant hurdles to overcome (both within the UK and with the EU) before a “soft” Brexit is assured”.
“Sterling extended gains to the 1.3080 area overnight but intraday patterns are looking a little soft again, with the 1- and 6-hour charts reflecting bearish price developments over the past few hours (bearish outside range reversals). Spot is pressuring minor support around 1.3015 at writing and we look for losses to extend back to the low/mid 1.29s on a break lower”.
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