The Pound Sterling (GBP) is a moderate outperformer on the session, helped by the prospect of the BoE taking a pass at this week’s rate decision and holding off on easing rates again until later in the year, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

GBP outperforms

“Swaps reflect a little more than 25% risk of a cut this week. CPI data tomorrow are expected to underscore BoE patience; headline CPI is expected to remain steady at 2.2% Y/Y but core prices and services inflation especially are expected to remain elevated. September’s Rightmove House Price index confirmed recent signs of a strength in the UK housing market, gaining 1.2% in the year.”

“GBP gains on the session are pushing up against consolidation resistance in the low/mid-1.32s. The chart patterns are not as “clean” as the signals on the EUR’s daily chart but a GBPUSD push above 1.3230/40 should signal scope for additional strength.”

“Like the EUR, however, the GBP is getting some solid technical tailwinds from bullishly-aligned trend momentum signals on the intraday, daily and weekly charts once again. This should limit scope for GBP dips (to the mid/upper 1.31s now) and keep the bull trend grinding on. Resistance is 1.3265 and (major) 1.3330.”