GBP/USD to signal more downside potential towards 1.25 on a break under 1.26 – Scotiabank

GBP/USD eases to retest the 1.26 support. Economists at Scotiabank analyze the pair’s outlook.

UK wage growth slows sharply

Slowing wages and some easing in labour market tightness will help dampen broader price pressures and pave the way for lower BoE rates later this year.

Cable continues to respect the 1.2600/1.2825 range in place over the past month. 

Trend signals are leaning a bit more GBP-bearish but the pair really needs to crack 1.26 to signal more downside potential towards 1.25, if not lower.