GBP/USD: Limited downside potential for now – Scotiabank

GBP/USD consolidates in the mid-1.25s. Economists at Scotiabank analyze the pair’s technical outlook.

Some modest downside risk in the very near term

It’s been a solid week for the Pound overall though and gains to a four-week high earlier today should draw in trend chasers and momentum traders looking for the GBP to retest the early May peak.

Intraday price action looks a little soft, suggesting some modest downside risk in the very near term but the broader trend in Cable looks constructive and is backed by positive developments on the intraday and daily trend oscillators (DMI) which should mean limited downside potential for the Pound for now.

Look for support on dips towards 1.2500/10.