GBP/USD drops back to 1.2600. Economists at Scotiabank analyze the pair’s outlook.

Move higher has stalled in the short run

Sterling has struggled to exploit regaining 1.2600 – formerly strong support – this week. 

Trend signals have retained a bearish undertone on the intraday and daily studies through the GBP’s mini-rebound this week, underscoring a soft undertone for the Pound after losing key support. 

Short-term price signals do suggest the move higher has stalled in the short run. Weakness through 1.2600 may see losses extend back to the low/mid 1.2500s again.