British Pound: Improving sentiment supports gains against US Dollar – Scotiabank

Scotiabank strategists Shaun Osborne and Eric Theoret report that the British Pound has seen fractional gains against the US Dollar, outperforming other G10 currencies. This improvement in sentiment is attributed to recent UK data, including Q2 GDP and production figures. The analysts highlight that short-term technicals are bullish, with the Relative Strength Index (RSI) at fresh highs, suggesting potential upside targets in the mid-1.35s to mid-1.36s.

Support is expected around 1.3400, with a near-term trading range of 1.3480-1.3580. Market analysts caution that fundamental releases have been limited, emphasizing the significance of the aforementioned data releases. The next upside target is noted as the mid-July high, near the mid-1.35s, while the May 1 peak in the mid-1.36s is also mentioned.

GBP/USD experienced mild losses around 1.3550 during early Asian trading hours, while the US Dollar edged higher against the British Pound due to Middle East tensions and hawkish remarks from Federal Reserve Chair Kevin Warsh at the Jackson Hole symposium. Meanwhile, the EUR/USD pair struggled to capitalize on overnight gains, trading near the 1.1575-1.1580 region, or a one-and-a-half-week low, and drifted lower during the Asian session.

Spot prices for the GBP/USD pair are currently trading around 1.1600, down nearly 0.10% for the day, as US Dollar strength persists amid trader focus on the Eurozone's preliminary Harmonized Index of Consumer Prices (HICP) reading.