GBP/USD resistance has moved down from 1.33 to 1.32 - Scotiabank

Eric Theoret, analyst at Scotiabank, notes that GBP/USD short-term technicals are bearish and resistance has moved down from 1.33 to 1.32”

Key Quotes

“GBP is showing signs of stabilization following Friday’s Brexit-headline-driven decline as market participants considered early clues to the timeline for negotiations. Two unnamed officials have reportedly suggested an April 2017 start to the two year process.”

“This week’s data schedule is limited to Friday’s second (preliminary) release of Q2 GDP, expected unchanged at 0.6% QoQ. The broader USD is likely to remain dominant and market participants are likely to remain overwhelmingly focused on the outlook for the Fed heading into Jackson Hole. The 2Y yield spread has widened further, breaching the multi-decade wide from May 2000 at -62bpts.”

“Investors are looking to continued GBP weakness, with CFTC data showing a built to fresh record bearish positions as of August 16”

“GBPUSD short-term technicals: bearish—Friday’s bearish outside day hints to a turn following a short-lived rally from Tuesday. Resistance has moved down from 1.33 to 1.32, and we look to near-term downside with a break back below 1.30.”