GBP/USD a good deal of BoE easing is priced into the pound - Scotiabank

Shaun Osborne, Chief FX Strategist,  said they believe that a good deal of BoE easing is priced into the pound, so further weakness will hinge on the actual scale of the ease and/or BoE messaging. 

Key Quotes

“Sterling has under-performed broadly in the overnight session and has failed conspicuously to participate in the broader positioning squeeze on the USD. UK asset managers reported significant net outflows following Brexit and Lloyds Bank reported 3000 job cuts in a post-Brexit review of costs. Further “hard” evidence of the consequences of Brexit for BoE policy makers to mull next week. At this point, we have to think that a good deal of BoE easing is priced into the pound so further weakness will hinge on the actual scale of the ease and/or BoE messaging. Gov Carney has certainly not stood in the way of a weaker pound. We remain bearish.”

“GBPUSD short-term technicals: bearish—In broad terms, Cable continues to consolidate (bearish, triangular continuation pattern) after the sharp drop seen through late June/early July. We spot intraday resistance at 1.3230/40. Support is 1.3100 intraday. Major (bear break out) support is 1.3015.”