GBP/USD faces extra gains above 1.3850 – UOB

According to FX Strategists at UOB Group, Cable remains in a consolidative range in the near term, although further upside is expected above 1.3850.

Key Quotes

24-hour view: “We highlighted yesterday that ‘momentum indicators still appear to be ‘neutral’’ and we expected GBP to ‘trade sideways between 1.3720 and 1.3780’. GBP subsequently traded between 1.3732 and 1.3800 before closing largely unchanged at 1.3768 (+0.08%). The underlying tone has improved somewhat and GBP could edge above 1.3800. For today, a sustained advance above this level is unlikely (next resistance is at 1.3850). Support is at 1.3745 followed by 1.3720.”

Next 1-3 weeks: “We have expected GBP to trade between 1.3640 and 1.3850 since last Tuesday (24 Aug, spot at 1.3720). Yesterday (01 Sep, spot at 1.3755), we noted that the recent build-up in shorter-term momentum has fizzled out and we continue to expect GBP to trade between 1.3640 and 1.3850. There is no change in our view for now but looking ahead, a break of 1.3850 would indicate that GBP is ready to head higher. Meanwhile, a 1.3690/1.3850 range is likely enough to contain the movement in GBP, at least for a few more days.”