GBP/USD could re-visit 1.30/1.29 – Scotiabank

Shaun Osborne, Chief FX Strategist at Scotiabank, believes Cable could slip back towards the 1.30/1.29 region on a breach of 1.3150.

Key Quotes

“The GBP is tracking lower as a poor domestic political backdrop overshadows and outweighs the positive sentiment that developed through Sep on the back of BoE rate hike speculation. PM May’s set-piece speech at the Conservative party conference yesterday could not have gone worse for her – poorly delivered, interrupted by a prankster and with a stage backdrop that started to fall apart as she was speaking. Speculation surrounding her longevity has naturally risen again, undercutting sentiment for the GBP”.

“Cable has drifted steadily lower since the mid-Sep peak above 1.36 and is reaching a new low for the subsequent move lower this morning. Cable broke below the 50% retracement support of the 1.28/1.36 move up yesterday and is nearing the key (from our point of view) 40-day MA support at 1.3150; a break below here targets additional losses towards 1.29/1.30”.