• GBP upside has largely been a by-product of legacy shorts unwinding
• With little in the way of new news, the bear bias has become stale
• Keep in mind, GBP is a high yielder, thus expensive to hold short in quiet times
• That said, with the BoE is an easing cycle, focus will be on incoming data
• In particular, the data to watch in the UK jobs and CPI
• Given that a Dec cut is near fully priced, the 2026 outlook matters more
• With 50bps of easing priced by April, there is room for a dovish repricing
• Resistance in cable sits at 1.3368 (100DMA). Support =
1.3200
GBP daily chart

Justin McQueen is a Reuters market analyst. (The views expressed
are his own).
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