Pound Struggles to Build on Data Amid Hawkish BoE Hold
The British Pound has made limited gains against the US Dollar despite stronger-than-expected retail sales data for August. Scotiabank strategists Shaun Osborne and Eric Theoret argue that Thursday's hawkish Bank of England hold may be capping near-term gains.
According to Osborne and Theoret, the pound is struggling to build on the positive data, which showed a solid print well above expectations of a modest contraction in consumer spending. They also point out that market participants and media continue to signal confidence in the government's efforts to maintain fiscal responsibility.
The analysts note that while the broader uptrend from June persists, the GBP/USD must hold above the mid/lower-1.33s to preserve ascending support. Technically, they see limited near-term resistance ahead of 1.3480 and look to near-term support around 1.3320.
The RSI is bearish, having reached the oversold threshold at 30, but the medium-term trend from June remains bullish.