GBP/USD holds key support in low-1.19s. Economists at Scotiabank analyze the pair technical outlook.

Paring back BoE rate bets will weigh on the Pound

“Markets continue to imply solid expectations that the policy cycle will extend, with three more 25 bps hikes priced in through Sep; paring back of these rate bets (while the Fed and ECB remain relatively hawkish) will weigh on the Pound.”

“Cable has rebounded from the low 1.19 area for a third time since mid-Feb. While this area is important support on the short-term charts, recall that 1.1916 (currently) is where the 200-DMA lies and provides additional support for the GBP.”

“More range-trading around the 1.20 point may develop from here (resistance is 1.2150) in the short run.”