The Pound Sterling (GBP) is currently trading lower, following the trend of the US Dollar (USD), according to Shaun Osborne, the Chief FX Strategist at Scotiabank. The risk of easing further is looming if the 1.3313 support level is broken.
In September, the UK Manufacturing PMI remained unchanged at 51.5. BoE policymaker Greene, who dissented when the MPC voted to cut rates in August, mentioned that a rebound in consumer demand could potentially lift inflation again. While prices are moving in a positive direction, the speed of progress is uncertain.
Despite recent gains, the Pound Sterling has stalled around the low 1.34 area. A possible double top at 1.3430 is causing concern on the short-term chart. If the support at 1.3313 is lost, it could lead to further downside for Cable, with a potential target for the pound to drop to 1.3195/00.
Overall, the Pound Sterling’s performance is closely tied to the US Dollar’s movements, with the risk of further easing if key support levels are breached. The UK Manufacturing PMI staying unchanged in September reflects stability in the sector, while BoE policymaker Greene’s comments provide insight into the potential impact of consumer demand on inflation.
It is essential for traders and investors to keep an eye on key support levels such as 1.3313 and potential resistance levels like 1.3430 to gauge the Pound Sterling’s future performance accurately. The double top pattern at 1.3430 indicates a possible reversal in the short term, highlighting the importance of technical analysis in predicting market movements.
