Steadies after mild technical rebound from Thursday’s low – Scotiabank

This morning’s round of UK data was broadly weaker than forecast—Industrial Production fell 0.5% in September as manufacturing slumped, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

GBP steadies near term

“Services and construction output also fell, producing a 0.1% drop in monthly GDP (versus 0.2% forecast) and helping pull growth for Q3 overall down to 0.1% (versus 0.2% forecast). Sterling is up fractionally against a generally softer USD on the day but softer growth has helped limit gains to just over 0.1% intraday, the weakest gain of the major currencies.”

“Similar to the EUR chart, the GBP is showing signs of steadying after a bullish technical reaction to Thursday’s low point (1.2630) put in a short-term reversal on the intraday chart. Sterling has picked up a little support in European trade but needs to push on through 1.2710/20 for gains to develop more in the short run I think.”

“Gains are likely to be capped in in the low 1.28s for now—look for firm resistance at 1.2830.”