GBP/USD remains side-lined between 1.2420 and 1.2710 – UOB

Cable is expected to keep the consolidation theme unaltered in the short-term horizon, likely between 1.2420 and 1.2710, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our view for GBP yesterday was that it ‘could drift lower towards 1.2530 but barring a sudden pick-up in momentum, 1.2500 is likely out of reach’. Our view was not wrong as GBP edged to a low of 1.2512 before recovering. While downward pressure has eased, it is too early to expect a sustained recovery. From here, GBP could test the 1.2500 level first before a stronger rebound can be expected. For today, the next support at 1.2470 is unlikely to come into the picture. On the upside, only a break above 1.2610 would indicate that the risk has shifted to the upside (minor resistance is at 1.2585).”

Next 1-3 weeks: “Yesterday (16 Jun, spot at 1.2625), we highlighted that ‘the odds for a deeper pullback in GBP have diminished considerably’. The subsequent breach of the ‘strong resistance’ level at 1.2650 indicates that GBP has moved into a consolidation phase. From here, GBP is expected to trade between 1.2420 and 1.2710 for a period.”