GBP trades to fresh multi-year high – Scotiabank

Pound Sterling (GBP) is entering Wednesday’s NA session with a 0.1% gain again the US Dollar (USD) but losses against most of the remaining G10 currencies, trading erratically in response to the release of stronger than expected inflation data, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

RSI is bullish but not yet overbought

“BoE rate cuts have been pared back with markets taking out ~5bpts of easing by December, relative to Tuesday. These adjustments are offering the pound some support via spreads, paving the way for fundamental rate support following an erosion (narrowing) observed since early April.”

“GBP/USD is looking well supported, pushing to a fresh multi-year high, reaching levels last seen in February 2022. The RSI is bullish but not yet overbought, and resistance is limited ahead of the psychologically important 1.35 level.”