FXStreet (Guatemala) - Camilla Sutton, CFA, CMT, Chief FX Strategist at Scotiabank called for of a temporary downside test in GBP/USD which appears to be in action currently.



Key Quotes:



“Support lies at 1.7063 and resistance is at the recent high of 1.7180."



"Last week the BoE made no change to interest rate policy; with inflation pressures contained, expected to fall –0.1%m/m and come in at 1.6%y/y for June, the BoE does have some room. However, all indications from Governor Carney are that interest rate hikes are likely to begin earlier than the market expects but prove slow and cautious, ultimately peaking at lower levels than they would have historically."



"Financial stability risks are certainly a concern for the UK and Governor Carney and this is likely playing into the interest rate stance. For GBP, the near-term outlook is still relatively strong; but we’d expect gains to fade into year‐end, holding a Q414 target of 1.70."



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