The pound was stronger yesterday (particularly against the US dollar and the euro) but is weaker this morning. In the last 24 hours, there has been a limited amount of news and events that have influenced the currency. Thanks to the holiday season, there are a fewer number of Brexit-related news headlines. Instead, bullish momentum has continued to drive the pound higher against the US dollar and the euro. Thanks to optimism for an ultimate Brexit deal, the outlook for the currency remains positive. The main event this week is upcoming GDP growth figures to be announced on Friday. Our short-term and medium-term outlook remain bullish.
GBP/USD is currently just above 1.3380. EUR/GBP is up today and the pair is currently trading above 0.8810. The pound is flat against both the Australian dollar and the Canadian dollar. GBP/AUD is above 1.7440, while GBP/CAD is just above 1.7210.
This is a fairly light week for economic data and events from the UK. On Wednesday, Bank of England Governor Carney is set to make a speech. On Thursday we’ll see consumer confidence figures. Finally on Friday we’ll see Q3 GDP growth and the current account. Last week, the Bank of England suggested only gradual increases in future interest rates.
As the pound rises following Theresa May's calls for an election, we are now bullish on the currency in the medium-term. The pound is now trading within normal conditions. This is based on a range of technical indicators looking at a weekly chart.