GBP/USD further consolidation expected – UOB

Cable is seen neutral and expected to continue its rangebound trading in the near term, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Expectation for a retest of the 1.3965 support did not pan out as GBP rebounded strongly from a low of 1.3985. The up-move appears to be running ahead of itself and a move towards 1.4130 would not be surprising, a clear break above the next resistance at 1.4160 is not expected. On the downside, only a break of 1.4040 would indicate that the immediate upward pressure has eased (minor support is at 1.4065)”.

Next 1-3 weeks: “Despite the surprisingly strong rebound in GBP last Friday, we continue to view the price action as part of a ‘sideway trading’ phase. That said, the previously expected 1.3935/1.4100 consolidation range is probably too narrow and from here, a wider 1.3935/1.4160 range appears to be more representational of the current price action. Overall, there is no early indication that GBP is ready to embark on a sustained directional move anytime soon”.