The Pound Sterling (GBP) is marginally softer on the session but, like the EUR, trading has comfortably held its recent trading range, Scotiabank chief FX strategist Shaun Osborne notes.

GBP may strive to break above 1.2780/1.2810

“UK focus this week falls primarily on UK inflation data Wednesday. Prices may pick up in headline Y/Y terms and look a bit sticky across other measures. Services inflation is expected to slow only marginally to 5.5% Y/Y. Elevated prices should bolster the outlook for cautious BoE policy easing moving ahead and help bolster support for the GBP on dips.”

“Price action remains constructive for the GBP after the pound carved out a clear bull reversal (“morning star” pattern) on the daily candle chart last week. Progress is slow but the gains have broken the back of the downtrend in place since mid-July. Support is 1.2725/30. Gains through the 1.2780/1.2810 resistance band should see the GBP rebound extend to the upper 1.28s.”