Gbpusd To Stay Weak

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Gbpusd To Stay Weak

GBP/USD To Stay Weak With Little Chance Of Gains - Scotiabank

According to Scotiabank analysts, the GBP/USD pair will stay weak and will likely find support at the 1.20 level. In addition, the analysts also added that any gains in the GBP/USD will be limited with very little chance.

For now, the GBP/USD is trading in the middle range of the 1.2100s, while the forecast from Scotiabank sees it near the 1.20 region.

In the short term, the capable will likely trade in a choppy range with little distance between the top and the bottom band. Furthermore, any further gains in the GBP/USD will attract big sellers and will send the pair lower toward the nearest support.

1.20 Support Remains Relevant

If we look at the root cause of GBP/USD weakness, it can be traced back to the broader greenback strength and rising bond yields. At the same time, the GBP is having a hard time since the data from the UK isn't exactly painting a picture of a good economy.

At the end of the day, the more hawkish bank between the BoE and the Fed will be the winner. If the BoE is more hawkish, it will send the GBP/USD with a sign of GBP strength. On the other hand, a hawkish tone from the Federal Reserve will send the dollar higher, which is already at record-high levels against other currencies.

With the last quarter of 2023 in sight, the focus has shifted to the yearly close. The big firms will likely lose some of their FX positions before the year-end, which will also affect the GBP/USD position.

Similarly, we also have the Fed's meeting as well as the BoE meeting before the year's end. So, that's yet another factor that will influence the GBP/USD trend in the next few months. However, analysts from reputable firms like Scotiabank believe that cable will stay weak in the short term.

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