GBP/USD neutral, expected to consolidate near term – UOB

In view of FX Strategists at UOB Group, Cable is seen moving into a consolidative phase in the next weeks.

Key Quotes

24-hour view: “GBP traded between 1.2830 and 1.2901 yesterday, slightly narrower than our expected 1.2820/1.2900 consolidation range. However, the daily closing is on the strong side (NY close of 1.2896) and from here, there is room for GBP to edge above last week’s 1.2936 top. For today, a move beyond the next resistance at 1.2960 is not expected. Support is at 1.2860 followed by the 1.2830 low. The latter level is likely strong enough to hold any intraday pullback”.

Next 1-3 weeks: “GBP tested the strong 1.2800 support last Friday (exact low of 1.2800) before rebounding. The recovery has improved the underlying tone somewhat but it is too early to expect the start of a bullish phase. In other words, we continue to expect GBP to consolidate and trade sideways from here, albeit likely at a higher range of 1.2760/1.2960 (from 1.2700/1.2900 previously)”.