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GBP: Close at Current Levels (or Higher) Opens Bull Trigger

GBP

A close at current or higher levels would be the firmest close for GBP/USD since July last year, and brings the pair within striking distance of the 1.3142 bull trigger. 

  • While USD weakness has certainly played a part so far this week, today stands out on the GBP strength more broadly, with EUR/GBP currently testing 100-dma support at 0.8510 and looking vulnerable on any break of 0.8504, the 50% retracement for the upleg off the mid-July low. 
  • We wrote that the next leg for GBP could hinge on tomorrow's prelim August PMI numbers, with markets looking to confirm whether the stabilisation of sentiment in July was largely due to the perception of political stability after the General Election, or the beginning of a broader trend for stronger business confidence.
  • Both hiring and new orders provided greenshoots in the July survey - and further strength here could limit the pricing for BoE cuts across the second half of '24, via either softer pricing for September (7bps cuts currently priced) or December (cumulative 43bps priced).
CEEMEABulletUKGlobalForeign Exchange BulletsRegion
CEEMEABulletUKGlobalForeign Exchange BulletsRegion

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