GBP a mid-performer as markets await BoE Government speech – Scotiabank

Pound Sterling (GBP) is up 0.8% against the US Dollar (USD) and relative underperformer against its European currency peers CHF, EUR and SEK. GBP’s gains are threatening the September 2024 highs, and a break would see it trading at levels last seen in early 2022, Scotiabank's Chief FX Strategist Shaun Osborne notes.

Next meaningful resistance level is expected to be around 1.35

"This week’s data highlight will be the release of preliminary PMIs on Wednesday, and retail sales on Friday. BoE Gov. Bailey will also speak on Wednesday, providing an opportunity to manage expectations ahead of the next policy decision on May 8. Markets are currently pricing 21 bps of easing for the meeting and a cumulative 50bpts of easing by early August."

"GBP/USD’s sharp gains have pushed it to fresh local highs nearing 1.34 and within close reach of the September 2024 high in the mid/low-1.34s. Momentum is bullish, and the RSI is just above the overbought threshold at 70. The next meaningful resistance level is expected to be around 1.35. Near-term support is expected in the mid-1.32s."