FXStreet (Barcelona) – Eric Theoret, CFA, CMT, Currency Strategist at Scotiabank, notes that GBP/USD is quiet, consolidating within a relatively narrow range following Thursday’s rally to fresh multi-month highs, with short-term technicals pointing towards a bullish outlook.
Key Quotes
“This week’s developments have provided for a material shift in the balance of risk to the BoE outlook, firming expectations of policy normalization as market participants responded to the combination of wage-focused BoE minutes concurrently released alongside strong wage data with weekly earnings climbing to a 6-year high.”
“BoE MPC members Forbes’ subsequent speech highlighting the resilience of domestically generated inflation (DGI) also helped to reinforce a modestly hawkish bias. OIS are pricing in a 48% chance of a rate hike over the next 12 months.”
“GBPUSD short-term technicals: bullish—RSI is stabilizing at overbought threshold of 70 and MACD is flattening out. We see limited support before 1.5650 with resistance above 1.5950.”
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