GBP/USD: Sustained push back above 100-DMA at 1.2017 should enhance the rebound – Scotiabank

GBP gains have extended today to retest the 1.20 area. A move above the 100-Day Moving Average (DMA) of 1.2017 could enhance Pound’s rebound, economists at Scotiabank report.

January GDP rebound

“Jan industrial and manufacturing activity was a little weaker than expected but service sector growth was stronger, driving a 0.3% gain in monthly GDP, above the 0.1% gain expected. The data suggest the UK economy may hold up better than most have been expecting in the early part of this year and might possibly avoid a recession.”

“A sustained push back above 1.2017 (100-DMA) should enhance the Pound’s rebound but that may be a bit of a reach in the short run, with trend signals tilted bearishly for the GBP on daily and weekly studies.”