GBP/USD: Gains will be sustainable for now — Scotiabank

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The GBP/USD it remains below the highs of the week while the uptrend is maintained. Scotiabank economists they expect the cable to continue on a firm footing.

GBP recovery will remain positive as long as the 1.1995 level holds

“We continue to believe that sterling has rebounded strongly enough from the September record low for gains to be sustainable, at least for now; fiscal policy has stabilized and market confidence has stabilized, which should allow the pound to hold around 1.20 or a little better going forward.”

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“Pound gains have been supported by strong signs of trend strength on the daily and intraday chart, but longer-term studies suggest that a considerable degree of residual bearish momentum is intact, making it a bit more Pound’s recovery difficult at the moment. However, trends are positive and we expect GBP’s recovery to remain positive as long as November’s uptrend holds (support at 1.1995 currently).”

Gains through 1.2155 (this week’s high) point to a resumption of bullish momentum.

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Source: Fx Street

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