GBP/USD poised for consolidation between 1.2800/1.3010 – UOB

According to FX Strategists at UOB Group, Cable remains neutral near term, likely to gravitate between 1.2800 and 1.3010.

Key Quotes

“While GBP extended its weakness to exceed the target indicated at 1.2775 (low of 1.2770), the subsequent swift and sharp swing higher was clearly unexpected. The advance appears to be over-extended and while a retest of the overnight high at 1.2921 is not ruled out, the next resistance at 1.2950 is likely strong enough to contain any further GBP strength”.

“The bearish phase that started last Friday (spot at 1.2900) ended abruptly when GBP surged to take out the stop-loss at 1.2910 (high of 1.2921). The partial profit-taking level indicated at 1.2755/60 was not met with a low of 1.2770. The current movement is viewed as the start of consolidation phase and GBP is expected to trade sideways for now, likely within a broad 1.2800/1.3010 range. Looking further ahead, GBP has to move clearly below 1.2755/60 to indicate the start of fresh bearish phase”.