GBP/USD seen rangebound between 1.2100/1.2300 – UOB

FX Strategists at UOB Group expect Cable to remain in a consolidative theme between 1.2100 and 1.2300 in the next weeks.

Key Quotes

“Expectation for a stronger rebound was wrong as GBP plummeted to hit a low of 1.2110. Despite the bounce from the low, the undertone is still negative and a full test of the major 1.2100 support seems likely. Only a move back above 1.2205 would indicate that the immediate downward pressure has eased (minor resistance at 1.2180)”.

“We shifted from a bearish to neutral stance yesterday and there is no change to the view. However, the sharp drop to a low of 1.2110 during London hours came as a surprise even though this level is still within our expected consolidation range of 1.2100/1.2300. Shorter-term downward momentum has picked up again and a clear break below 1.2100 would indicate the start of a fresh bearish phase. In the meanwhile, the immediate bias is on the downside unless GBP can move above 1.2250”.