GBP/USD 1.32 resistance to cap - Scotiabank

Analysts at Scotiabank explained that Sterling is little changed on the day. 

Key Quotes:

"UK data releases showed a 94k gain in employment, an unchanged 4.3% unemployment rate and a 2.1% y/y gain in average weekly earnings, down from an upwardly-revised 2.2%. 

The data is strong enough to persuade markets that the BoE is a little more likely to raise rates in the near future, with Nov still favoured. 

Market priced Nov rate hike risk at a 75% chance of 25bps tightening last week. Probabilities have improved to 83% today. 

Cable sustained losses below the 40-day MA (1.3219) through the close yesterday, giving the broader technical picture a negative hue. 

But follow through selling has been limited on the day and intraday price action looks modestly positive. 

We see resistance at 1.3200, however, and feel that regaining the 40-day MA benchmark is the minimum the pound needs to accomplish to stabilize."