GBP/USD: Rally still capable of extending toward 1.2750/00 – Scotiabank

GBP/USD is holding in a flat, sideways consolidation range. Economists at Scotiabank expect the pair to extend its race higher toward the 1.2750/00 area.

Rate prospects are GBP-supportive 

“Rate prospects are GBP-supportive. Markets continue to price in around 80% risk of a 25 bps hike in the BoE policy rate at the May 11th meeting but also anticipate only modest declines in the policy rate over the balance of the year.”

“Support is 1.2465/70. Resistance is 1.2520/25.”

“GBP gains through the mid 1.24 area (major highs from late 2022/early 2023) still confer a bullish outlook on the GBP and should mean solid support on dips to mid/upper 1.24 area from here.” 

“The GBP rally still looks capable of extending toward 1.2750/00.”