GBP/USD moved into a consolidation phase – UOB

Cable’s outlook remains neutral and is expected to stay sidelined in the next weeks, according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “In line with expectation, GBP traded sideways last Friday before ending the day largely unchanged (close at 1.3408, -0.10%). The registered range of 1.3355/1.3439 was reasonably close to our expected 1.3360/1.3450 range. Despite consolidating, the undertone for GBP has weakened a tad and the immediate bias is tilted to the downside. That said, any weakness is likely limited to a test of the 1.3350 support and a sustained decline is not expected. On the upside, resistance is at 1.3440 followed by last week’s peak near 1.3475”.

Next 1-3 weeks: “When we turned neutral on Monday (04 Jun, spot at 1.3355), we held the view that GBP has moved into a correction phase. We added the positive shorter-term momentum could “lead to a move higher to 1.3465”. GBP hit a high of 1.3472 yesterday before easing off quickly. Despite the pullback, the underlying tone is still positive and another push higher towards the next resistance at 1.3520 is not ruled out (even though the odds are not high). Only a move back below the ‘key support’ at 1.3350 (level unchanged) would indicate that the current mild upward pressure has eased”.