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The prospects for Cable remain bullish in the near term horizon, according to FX Strategists at Scotiabank.

Key Quotes

“UK retail sales rose a better than expected 0.3% in Aug while Jul sales were revised higher to 1.1% (from 0.9%). That’s the good news. That bad news is that the Salzburg EU summit appeared to make little progress on Brexit; PM May appealed for concessions from the EU but France and German sounded less confident on a deal. EC President Juncker said a deal remained “far away”. Sterling is riding higher on a generally weaker USD but is weaker against the EUR today. We think recent Brexit optimism is somewhat misplaced”.

“It’s hard to argue with the trend in Cable in the short run and the pound’s progress through some key levels recently (1.3070 and 1.32) has been impressive. Trend momentum is bullish on the shorter term studies an we think GBPUSD could make additional gains towards 1.3300/50 (1.3320 is the 38.2% Fib retracement of the 1.44/1.26 drop)”.