GBP/USD: A deeper rebound to the 1.25/1.26 zone looks feasible – Scotiabank

GBP/USD adds to solid gains last week. Economists at Scotiabank analyze the pair’s outlook.

Dips to the 1.23 area should remain well-supported

Solid gains in the GBP last week have propelled Cable back to the 200-DMA – or very close to it (1.2436). There is some additional resistance a little above spot (congestion from early September and the 38.2% retracement resistance of the H2 slide in the GBP/USD pair) which may slow gains in the near term in the mid/upper 1.24s. GBP dips to the 1.23 area should remain well-supported, however.

A deeper rebound to the 1.25/1.26 zone looks feasible as bullish trend momentum develops.