GBP/USD further scope for appreciation towards 1.3550 - Scotiabank

Shaun Osborne, Strategist at Scotiabank noted that today’s UK manufacturing data will comfort the Brexiteers and dismay pro-EU peers but it is still very early in the process. The technical picture is neutral, according to the analyst.

Key quotes

“Cable is up more than a cent from this time yesterday, helped by the surprising robustness in the UK manufacturing data. The news will comfort the Brexiteers and dismay pro-EU peers but it is still very early in the process.”

“A weak exchange rate is helping manufacturing prospects but a more important reflection of growth will come from the services side of the economy. Still, data this week have reflected better consumer sentiment and house price data as well as near-term GBP strength – extending the rebound versus the EUR towards 0.83 – should not surprise.”

“GBPUSD short-term technicals: neutral—Cable looks firm and has tested the 1.3250 threshold we think defines the upper end of the recent consolidation. Intraday gains have exceeded this point slightly but a closing break would put a more definitive shine on the GBP near-term and suggest some further scope for appreciation towards 1.3550.”