GBP/USD remains neutral near term – UOB

FX Strategists at UOB Group stay neutral on Cable and believe it remains poised to extend the consolidative theme in the next weeks.

Key Quotes

24-hour view: “We expected a lower GBP yesterday but held the view that “any weakness is likely limited to a test of the 1.3350 support”. However, the release of a weaker than expected UK data sent it tumbling to a low of 1.3345. Despite the subsequent sharp bounce from the low, downward momentum has picked up and this could lead to a probe of the next support at 1.3330. Resistance is at 1.3410 followed by 1.3440. The latter level is acting as a rather strong resistance now”.

Next 1-3 weeks: “The recent mild upward pressure has eased as GBP dipped below the 1.3350 ‘key support’ yesterday (low of 1.3345). However, there is no change to the current neutral outlook but GBP is more likely to trade sideways for now, expected to be between 1.3250 and 1.3470 (we previously see scope for a stronger rebound to 1.3520)”.