GBP trades marginally higher – Scotiabank

The Pound Sterling (GBP) has crept a little higher over the course of the trading day so far. UK data showed in line with expectations wage growth (4.0% Y/Y for Average Weekly Earnings in the July quarter, 5.1% for ex-bonus pay) and a marginal fall in the unemployment rate (4.1%, from 4.2%) over the same period,

Intraday trend signals are neutral

“Policymakers will welcome slower wage growth but gains are still too rich to be compatible with the BoE’s inflation target. Swaps are pricing in marginally less risk of an already unlikely BoE cut next week as a result (4bps of easing versus 5-6bps yesterday).”

“Like other pairs, there are negative daily and weekly prints on the GBP charts which suggest downside risks in the near-term. Like other pairs though, the GBP/USD charts also reflect a lot of residual bullish momentum via oscillator studies which are curbing downside impulses for now.”

“Short-term patterns on the GBP/USD look corrective after the August rally in the pound. c, suggesting more range trading with a mild downside bias for now. Support is 1.3050/60. Resistance is 1.3110 and 1.3145/50.”