GBP extends Tuesday’s jobs-driven rally – Scotiabank

The Pound Sterling (GBP) is up 0.6% against the US Dollar (USD) and outperforming most of the G10 currencies into Wednesday’s NA session, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

GBP might face a possible break to fresh local high

"This week’s gains have been notable, extending the bull run that began on August 1 with GBP’s latest strength resulting from stronger domestic employment data and an outlook for relative central bank policy that reflects expectations for greater Fed easing. The UK-US spread has climbed to a fresh three month high, pushing above 15bpts for the first time since early May."

"The GBP’s latest gains have easily cleared the 50 day MA (1.3503) and the latest rally is now threatening a break of the late July high in the upper 1.35s. Momentum is bullish, and the RSI is now pushing above 60. We see little in terms of medium-term resistance ahead of the early July high in the upper 1.37s and look to a near-term range bound between 1.3500 support and 1.3620 resistance."