GBP pushes to fresh highs – Scotiabank

Pound Sterling (GBP) is performing well on the day with a 0.4% gain vs. the US Dollar (USD) and outperformance against most of the G10 currencies as it pushed to fresh highs at levels last seen in October, Scotiabank's Chief FX Strategist Shaun Osborne notes.

Near-term support is expected in the mid-1.31

"Sentiment appears to be dominating, offering GBP gains on the back of easing trade tensions and a better market mood overall. Fundamentally, the employment data were generally disappointing with softer than expected wage growth and a larger than expected contraction in payroll gains."

"GBP/USD has decisively cleared its prior local high just above 1.3200 and is now pushing toward the late Q3/early Q4 highs around 1.34. Momentum is bullish and the RSI is just below the overbought threshold at 70."

"We remain somewhat concerned by the negative divergence in momentum and the lack of confirmation for the fresh highs in spot. Near-term support is expected in the mid-1.31s."