GBP/USD: underlying bear rend remains intense, sell on rallies

Currently, GBP/USD is trading at 1.2246, down -0.43% on the day, having posted a daily high at 1.2302 and low at 1.2244.

GBP/USD is soft at the start of the week with the renewed confidence in the Fed and expectations of a solid nonfarm payrolls result this week to be the final data to inspire a rate hike from the FOMC meeting this month. However, the UK has a busy week ahead this week with the housing, IP and trade data that are due while Chancellor Hammond’s budget on Wednesday and Brexit Minister Davis’s questions in parliament on the political front. 

Economic outlook for the United States of America - Nomura

GBP/USD levels

Sterling has underperformed broadly since the start of the year and analysts at Scotiabank explained they expect Brexit risks to keep the GBP on the defensive in the near-to-medium term: 

"GBPUSD short-term technicals are bearish. Cable met strong resistance around 1.2300 late last week and again through the overnight session. The underlying bear trend in GBP/USD remains intense, with trend strength oscillators aligned bearishly on the short, medium and longer run charts. This implies little or no real sustained upside potential for the GBP at this point. Minor gains to the upper 1.22 area are a sell."

US Dollar around 101.50 post-US data