GBP/USD: 1.3700 or 1.4050 next? - Scotiabank

Analysts at Scotiabank explained that the wheels have really fallen off the GBP rally over the past week; dovish comments from BoE Gov. Carney were the essential catalyst but renewed focus on Brexit has not helped the GBP outlook. 

Key Quotes:

"The CBI’s retail sales monitor revealed a stabilization in the volume of sales in Apr but the overall tone of the report remains soft." 

"The case for a May rate hike remains highly debatable." 

"Neutral/bullish—Intraday price action looks modestly positive for the GBP, with price action on the 1 – and 6-hour charts suggesting a bullish reversal intraday now."

"This may boost the prospects for the pound to rally back through the 1.4040/50 resistance area in the near-term, through wee generally feel that the weak price action overall last week condemns the pound to a retest of support around 1.37 sooner, rather than later."