As the Pound Sterling (GBP) remains marginally softer in today’s trading session, it has managed to stay within its recent trading range, according to Scotiabank chief FX strategist Shaun Osborne.
GBP Outlook: Potential Breakout Above 1.2780/1.2810 Resistance Levels
Focus this week in the UK will be on the release of inflation data on Wednesday. The expectation is for prices to increase in headline year-on-year terms, with services inflation slowing only slightly to 5.5% year-on-year. These elevated prices could support a cautious approach to policy easing by the Bank of England, which in turn may provide support for the GBP on any dips in the market.
Recent price action for the GBP has been positive, with a clear bull reversal pattern seen on the daily candle chart last week. Although progress has been gradual, the gains have helped break the downtrend that has been in place since mid-July. Key support levels are at 1.2725/30, and a breakout above the resistance band of 1.2780/1.2810 could lead to further gains for the GBP, potentially pushing it towards the upper 1.28s.
Analysis:
In summary, the Pound Sterling is currently holding steady in the financial markets, with a potential for a breakout above key resistance levels. The upcoming UK inflation data release could provide further insights into the direction of the GBP in the near future. Traders and investors should keep a close eye on these developments to make informed decisions regarding their finances and investments.