The British Pound (GBP) has reached a three-month high against the US Dollar (USD), despite underperforming compared to its core European peers, according to Scotiabank strategists Shaun Osborne and Eric Theoret [1]. The strategists note that there are no major factors driving the pound's intraday performance, but attribute the market's cautious tone to the upcoming heavy United Kingdom (UK) data calendar, which includes key releases such as wages, jobs, Consumer Price Index (CPI), and Retail Sales [1].
From a technical perspective, the short-term outlook for GBP/USD remains bullish. The strategists highlight that minor new highs for Cable above the July peak, combined with solid underlying trend momentum, suggest that GBP could push on to retest the May high at 1.3660. Short-term support is identified at the 1.3530/50 level [1].
While the pound has made gains, the market appears to be in a holding pattern, awaiting the outcome of the upcoming UK economic data. The strategists emphasize that the market's cautiousness is likely due to the potential impact of these data releases on the currency's direction [1].
CONCLUSION
The British Pound's recent strength against the US Dollar is supported by bullish technicals, but market participants remain cautious ahead of significant UK economic data releases. The outcome of these data points will likely determine the next move for GBP/USD.