To consolidate near term – OCBC

The Pound Sterling (GBP) traded a touch softer last week, despite larger magnitude of decline seen in other FX including EUR, CHF. GBP was last at 1.2888 levels, OCBC’s FX analysts Frances Cheung and Christopher Wong note.

BoE keeps well GBP supported

“Hawkish BoE was one factor that kept GBP supported. Governor Bailey stressed on the need to make sure inflation stays close to target. Also, labour government’s budget may add to inflation, alongside Trump’s tariff plans. These reinforced our view that the BoE may have to stick with its gradual approach on lowering rates.

Daily momentum is flat while RSI shows little signal. Consolidation likely. Support here at 1.2870 (50% fibo) and 1.2820 (200 DMA). Resistance at 1.2990/1.30 (38.2% fibo retracement of Apr low to Sep high, 21, 100 DMAs), 1.3100 levels (50 DMA). Week’s data docket brings labour market data (Tuesday) and activity/GDP data (Friday).