GBP/USD keeps the consolidation between 1.2440/1.2600 – UOB

Cable continues to trade within a sidelined theme for the time being, likely within the 1.2440/1.2600 range.

Key Quotes

24-hour view: “Expectation for GBP to trade sideways was incorrect as it staged a relatively strong advance and touched 1.2580. The up-move appears to be running ahead of itself and while a test of 1.2600 is not ruled out, a sustained rise above this level is unlikely (next resistance is at 1.2630). Support is at 1.2540 followed by 1.2510”.

Next 1-3 weeks: “We held the view last Friday (12 Jul, spot at 1.2525) that “the recent downward pressure has eased” and that GBP is “expected to trade sideways, likely within a relatively broad range of 1.2440/1.2600”. While there is no change to our view, the rapid pace of which GBP move towards the top of the range at 1.2600 was not exactly expected (high of 1.2580 during NY hours on Friday). Looking ahead, GBP has to move and stay above 1.2630 in order to indicate that it is ready for a more sustained rebound. Meanwhile, we continue to expect GBP to trade sideways, likely within 1.2470/1.2600 (narrowed from 1.2440/1.2600)”.