- British pound fails to recover 1.3100, remains near medium-term lows.
- Pound’s recovery falters despite BoE rate hike expectations.
- GBP/USD decline could extend to 1.2500 – ScotiaBank.
the pound sterling remains slightly positive on Monday, fueled by subdued risk appetite, although its rebound from lows near 1.3000 has been limited below 1.3075.
Cable remains bearish at 16-month lows
GBP/USD is trapped inside a broader downtrend after a three-week sell-off. The pair has depreciated almost 5% from the late February highs of 1.3640, reaching levels just above the psychological level of 1.3000 for the first time since November 2020.
The British pound saw a moderate increase in demand on Monday, helped by a somewhat weaker dollar amid a slight improvement in sentiment following the Russia-Ukraine peace talks. Beyond that, investor expectations that the Bank of England will raise interest rates at next Thursday’s meeting have supported the GBP.
GBP/USD could extend its slide towards 1.2500 – Scotiabank
Regarding short-term expectations, Scotiabank’s FX research team sees the pound extending its downtrend: “Pound eyes break below 1.30. British pound faces no clear support until 1.2850 which marked the lows of Oct/Nov 2020, with losses likely to widen rapidly towards 1.25.”
Additional technical levels
Source: Fx Street
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