GBP/USD may still have a bumpy ride ahead - Scotiabank

Analysts at Scotiabank explained the recent developments around GBP/USD.

Key Quotes:

"UK manufacturing orders data from the CBI were softer than forecast, with the Feb index falling to 10, from 14 and versus 11 forecast; respondents also reflected softer expected trends in prices and overall output in the coming three months – though these trends have been relatively strong in recent months and may be reverting to more sustainable levels.

UK markets will gauge this week’s jobs and wage numbers to assess BoE policy risks while keeping a close eye on Brexit developments.

The GBP may still have a bumpy ride ahead:

Cable’s tumble last Friday also suggests some near-term headwinds for the pound from a chart point of view but the broader uptrend in the market remains intact and the GBP remains above the 40-day MA (1.3850).

Intraday price action looks somewhat more positive for the pound, with the decent bid emerging around the 1.3950 level; the GBP may be able to out-perform more broadly on the day."