GBP/USD has staged a rebound after testing key, short-term support at 1.2005. However, economists at Scotiabank still expect cable to move downward in the weeks ahead.

Short-term trend remains bearish

“Rising rates and falling private consumption amid surging prices are boosting recession risks in the UK and will maintain broader pressure on the GBP in the weeks ahead.”

“The short-term trend remains bearish and trend momentum signals are aligned bearishly for the pound currently, putting the market at clear risk of running back to (and a bit below) the July low at 1.1763.”