GBP/USD Consolidates Ahead of BoE Meeting and Key Economic Data
The British Pound has been consolidating against the US Dollar ahead of key economic releases and a Bank of England meeting. According to Scotiabank strategists Shaun Osborne and Eric Theoret, the GBP/USD exchange rate is relatively steady as it extends its recovery from last week's lows.
The upcoming release of UK trade and industrial data on Friday will likely increase market risk, with markets already pricing in a hawkish hold from the Bank of England next week. In fact, Osborne and Theoret expect policymakers to maintain their current monetary policy stance, which is widely expected to lead to a rate hike in November.
The strategists note that the GBP/USD exchange rate has been capped at around 1.35 but supported above 1.34 within an ascending trend channel established in late June. While they acknowledge that sentiment remains constructive for the pound, they caution that medium-term risks lean bullish given the clear uptrend.
In terms of technical analysis, Osborne and Theoret observe that the RSI (Relative Strength Index) remains close to neutral, hovering just above 50. They also point out that price action has revealed a struggle to extend beyond resistance in the mid-1.35s, limiting the near-term risk of a push back toward the local high around 1.3650.