The Pound Sterling (GBP) is tracking its major currency peers higher against the USD on the session—but is lagging the EUR somewhat, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

PMI data and USD softness push GBP/USD upwards

“UK PMI data was also supportive, however. Services PMI rose to 51.2 in January, ahead of forecasts of 50.8. Manufacturing also improved to 48.2.”

“A nice turn higher is developing on the Cable charts. The weekly reflects a potential bullish ‘morning star’ cancel pattern (assuming a firm close today) while the daily chart shows spot testing major trend resistance (off the late September peak) at 1.2417—which coincides with initial retracement resistance at 1.2415.”

“A firm daily close should see GBP gains extend towards 1.25/1.26.”