FXStreet (Guatemala) - Camilla Sutton, CFA, CMT, Chief FX Strategist at Scotiabank noted that GBP is strong, outperforming all the majors, but failing to break above the 200‐day MA at 1.6677.
The catalyst was the release of the BoE minutes from the August 6/7 meeting, where two members (McCafferty and Weale) voted in favour of a 25bpt interest rate hike. Their reasoning was based on: 1) fall in unemployment and survey evidence of tightening in the labour market could lead to a pick up in wage growth; 2) erosion of spare capacity would like remain rapid; 3) policy would remain supportive even after a 25bpt interest rate hike; 4) delaying a Bank rate increase might increase the risks associated with the first hike."
"GBP/USD short‐term technicals: bearish—all technical studies warn of downside risk but the RSI is only at 31, suggesting there is plenty of downside room before reaching oversold levels. Look for a test to 1.6460, the March low."