Sterling remains supported near key averages as analysts see potential for further gains
Sterling continues to show moderate strength against the US dollar, with GBP/USD trading around important long-term moving averages near the 1.34 level, according to Scotiabank’s Global FX Strategy team.
Short-term technical indicators remain neutral to slightly bullish, with recent gains and improving trend signals suggesting that the pound could have further upside potential in the coming sessions.
GBP/USD remains near key technical levels
Scotiabank noted that sterling was modestly higher during the session, although trading activity remained limited due to the absence of major UK economic data releases.
“Sterling is modestly firmer on the session but trading is limited, with no UK data reports this morning to drive volatility,” the analysts said, adding that UK government bonds were underperforming some European counterparts while EUR/GBP remained largely stable.
The bank described the current outlook as “neutral/bullish”, noting that GBP/USD continues to move around its 100-day and 200-day moving averages, both positioned close to the 1.34 level.
Pound shows potential for further upside
According to Scotiabank, the broader trading range that has dominated recent months remains intact, but last week’s advance has improved the technical outlook for sterling.
“A solid rise in Cable last week and bullish leaning trend oscillators suggest some upside potential for the pound,” the analysts said.
If GBP/USD breaks above the low 1.35 area, the pair could retest recent highs around 1.3555 to 1.3560.
Key support remains near 1.3390
While the outlook has improved, analysts identified the 1.3390 to 1.3400 region as an important support zone for sterling.
A move below this area could weaken the short-term bullish momentum, while sustained trading above 1.35 would increase the possibility of further gains toward recent peaks.
