The GBP/USD pair has been showing signs of volatility lately, with fluctuations occurring due to various economic and political factors. In European trade, the pair dipped but found support in the upper 1.22s. This trend has led economists at Scotiabank to suggest that the pair will test the mid 1.24s if it can break past the 1.2340 mark.
Short-term Trends Suggest Firm Resistance in the 1.2330/40 Zone
According to Scotiabank economists, there is firm resistance in the 1.2330/40 zone, meaning that the pair may struggle to break through this barrier in the short term. However, there is also a fair degree of GBP-bullish momentum underlying the market, which is providing firm support for Cable in the 1.2255/60 zone.
Gains through 1.2340 Target a Retest of the Mid 1.24s
Despite the resistance in the 1.2330/40 zone, Scotiabank economists believe that the GBP/USD pair has the potential to make gains and target a retest of the mid 1.24s. To achieve this, the pair will need to break past the 1.2340 mark, which is seen as a key level of resistance.
The GBP/USD pair has been subject to a range of economic and political factors in recent times, which have caused fluctuations in its value. These include ongoing Brexit negotiations, uncertainty around the US presidential election, and the COVID-19 pandemic.
Brexit negotiations have been ongoing since the UK voted to leave the European Union in 2016. While a deal was agreed in late 2020, uncertainties remain around its implementation and the impact it will have on the UK economy.
The US presidential election in 2020 saw Joe Biden defeat incumbent Donald Trump, which has caused some uncertainty around the direction of US foreign policy and trade relations. Meanwhile, the COVID-19 pandemic continues to impact economies around the world, with ongoing restrictions causing significant economic disruption.
In conclusion, the GBP/USD pair has been showing signs of volatility in recent times, with fluctuations occurring due to a range of economic and political factors. While there is firm resistance in the 1.2330/40 zone, Scotiabank economists believe that there is a fair degree of GBP-bullish momentum underlying the market, which is providing support for Cable in the 1.2255/60 zone. If the pair can break past the 1.2340 mark, they expect it to test the mid 1.24s.