GBP/USD could stabilize and improve – Scotiabank

Pablo Piovano FXStreet

FX Strategists at Scotiabank stay neutral on Cable for the time being.

Key Quotes

“Sterling has weathered the overnight tariff “storm” relatively well and is trading little changed overall from levels seen late yesterday... It helps also that GBP sentiment was already beaten up by domestic political developments. PM May’s position remains delicate but, with two weeks of the current parliamentary session to go until recess, a push to remove her now remains a very low risk, we think. A bigger challenge will come in Oct, when she will have to try and move Brexit legislation through parliament. In the meantime, investors can perhaps focus a little more on the bounce in the UK economy and the potential for an Aug rate increase by the BoE”.

“Cable looks soft but the USD is not really pressuring the GBP to new lows, even in the short run. Unless early North American trade makes a run for the lows seen earlier this week between 1.3200/25, the pound may be able to stabilize and improve. Resistance is 1.3295/00 (40-day MA at 1.3298)”.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

EUR/USD trims gains, hovers around 1.1900 post-US data

EUR/USD trades slightly on the back foot around the 1.1900 region in a context dominated by the resurgence of some buying interest around the US Dollar on turnaround Tuesday. Looking at the US docket, Retail Sales disappointed expectations in December, while the ADP 4-Week Average came in at 6.5K.

GBP/USD comes under pressure near 1.3680

The better tone in the Greenback hurts the risk-linked complex on Tuesday, prompting GBP/USD to set aside two consecutive days of gains and trade slightly on the defensive below the 1.3700 mark. Investors, in the meantime, keep their attention on key UK data due later in the week.

Gold loses some traction, still above $5,000

Gold faces some selling pressure on Tuesday, surrendering part of its recent two-day advance although managing to keep the trade above the $5,000 mark per troy ounce. The daily pullback in the precious metal comes in response to the modest rebound in the US Dollar, while declining US Treasury yields across the curve seem to limit the downside.

XRP holds $1.40 amid ETF inflows and stable derivatives market

Ripple trades under pressure, with immediate support at $1.40 holding at the time of writing on Tuesday. A recovery attempt from last week’s sell-off to $1.12 stalled at $1.54 on Friday, leading to limited price action between the current support and the resistance.

Dollar drops and stocks rally: The week of reckoning for US economic data

Following a sizeable move lower in US technology Stocks last week, we have witnessed a meaningful recovery unfold. The USD Index is in a concerning position; the monthly price continues to hold the south channel support.