GBP/USD now seen between 1.2750 and 1.3000 – UOB

Cable is now forecasted to navigate within the 1.2750-1.3000 range in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Yesterday, we highlighted that ‘while the rally appears to be overdone, GBP could retest the 1.2930 level before a more sustained pullback can be expected’. Our expectation did not materialize as GBP traded in a relatively narrow range between 1.2824 and 1.2902. The underlying tone still appears to be firm and the bias from here is tilted to the upside. That said, in view of the lackluster momentum, the odds for a clear break of 1.2930 are not high (1.2900 is already quite a strong level). On the downside, a break of 1.2820 would indicate the current mild upward pressure has eased (minor support is at 1.2840).”

Next 1-3 weeks: “Last Friday (25 Sep, spot at 1.2755), we indicated that ‘shorter-term momentum is beginning to ease and this could lead to a couple of days of consolidation first’. We added, ‘as long the ‘key resistance’ at 1.2830 is not taken out, another down-leg towards 1.2650 is still a distinct possibility’. However, GBP blew past 1.2830 as it soared to an overnight high of 1.2930. The break of the ‘strong resistance’ indicated that the negative phase in GBP that started last Tuesday (22 Sep, spot at1.2820) ended sooner than expected (we were expecting another leg lower to 1.2650). The current movement is viewed as the early stages of a consolidation phase and GBP could trade between 1.2750 and 1.3000 for now.”