GBP/USD: the pound is up, but broader trend dominates – Scotiabank

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Analysts at Scotiabank noted that the pound is up vs the dollar.

 Key Quotes:

“EU Commissioner Moscovici remarked that it was not necessary to have a Brexit deal with the UK but also commented that the UK referendum could “in theory” be reversed.”

“A UK government spokesperson said a deal was still possibly by Oct, but we view this as perhaps the latest date for an agreement to be reached – beyond that, the ratification process would likely encroach on the March 2019 “divorce” deadline. Sterling may struggle to sustain gains while Brexit risks persist.”

“Sterling is steadier overall, with the broader sell-off having stalled last week (weekly doji candle). Intraday patterns are mildly constructive, with the pound essentially edging steadily higher since last Wednesday. But we also think the broader downtrend is still well-entrenched in this market. The rebound in the pound might only serve to relieve oversold conditions that have accumulated in this market in recent weeks.”

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