GBP trades marginally higher – Scotiabank

The British pound (GBP) has moved slightly higher throughout the trading day so far. UK data showed in-line wage growth (4.0% y/y for average weekly earnings in the July quarter, 5.1% for ex-bonus pay) and a marginal fall in the unemployment rate (4.1% , from 4.2%) compared to the same period,

Intraday trend signals are neutral

“Politicians will welcome slower wage growth, but earnings are still too rich to be compatible with the BoE’s inflation target. Swaps have marginally less risk of an already unlikely BoE cut next week as a result (4bps easing vs 5-6bps yesterday).

“Like other pairs, there are negative daily and weekly prints on the GBP charts that suggest short-term downside risks. Like other pairs, however, the GBP/USD charts are also reflecting a lot of residual upside momentum via oscillator studies, which is limiting bearish momentum for now.”

“GBP/USD’s short-term patterns look corrective after the pound’s August rally. c, suggesting more trading in the range with a slight downtrend for now. Support is 1.3050/60. Resistance is 1.3110 and 1.3145/50.”