GBP/USD still bearish, scope for a test of 1.3000 – UOB

Cable’s stance remains bearish, while a visit to the 1.3000 handle still remains a chance, according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “The strong rebound in GBP that hit an overnight high of 1.3184 was unexpected. The recovery appears to be running ahead of itself and a clear break above the overnight high is not expected. GBP is more likely to trade sideways at these higher levels, likely between 1.3090 and 1.3180”.

Next 1-3 weeks: “We just shifted to a bearish stance last Friday (06 Oct) and there is no change to the view. As highlighted, while the recent decline in GBP has been rather rapid, there is room for further weakness towards the next support at 1.3000 (low has been 1.3027 during NY session on Friday). On the upside, only a move back above 1.3200 (stop-loss adjusted lower from 1.3250) would indicate that a temporary low is in place. Positioning wise, the sell level suggested at 1.3170/75 was not met and it appears that we have missed the ideal selling opportunity”.