GBP/USD support emerges near 1.2880 – Scotiabank

In view of Eric Theoret FX Strategist at Scotiabank, Cable should stay supported around the 1.2880 area in the near term.

Key Quotes

“Another round of Brexit negotiations is set to begin this week, and we note the absence of any significant data ahead of Friday’s manufacturing PMI. Spreads are wide, positioning is net short, and risk reversals are showing a continued rise in the premium for protection against GBP weakness”.

“the near-term balance of risk appears to favor GBP strength following Friday’s completion of a bullish three candle morning star reversal formation. GBP has climbed back above its 100 day MA (1.2895) and is threatening its 50 day MA. We note the potential for resistance at the August 15 open 1.2964 and the 21 day MA at 1.2973. Near-term support is expected at 1.2880”.