GBP flat vs. USD and outperforming G10 - Scotiabank

The Pound Sterling (GBP) is entering Friday's NA session flat vs. the US Dollar (USD) and showing some signs of near-term stability following a bounce off of support at 1.34, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret note.

Spreads remain supportive

"Domestic releases have been limited, and fundamentals remain supportive given the steady rise in UK-US yield spreads over the past three weeks. Jackson Hole is the primary focus, with all eyes on Fed Chair Powell's 10am ET speech. BoE Gov. Bailey is also set to participate in a panel on Saturday alongside ECB President Lagarde and BoJ Governor Ueda."

"We remain medium-term GBP bulls and see scope for continued gains on the back of an erosion in the market's dovish pricing. Markets are still pricing roughly 10bpts of easing by year-end and have shed roughly 10bpts since the last BoE meeting on August 7."

"Defensive price action has delivered a fresh marginal low but the overall technical picture remains neutral with an RSI just below 50. The 1.3400 level looks to have offered some intraday support, and we anticipate further support in the mid-1.33s. We note the importance of the 50 day MA (1.3492) in providing a medium-term anchor."