GBP/USD: Further downside not ruled out – UOB

Occasional pullbacks in Cable should remain within the broad 1.2950-1.3160 range, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected GBP to strengthen yesterday but were of the view that ‘the strong resistance at 1.3115 is likely out of reach’. However, GBP popped to a high of 1.3125 before dropping back down. Momentum indicators are turning ‘neutral’ and for today, GBP is likely to consolidate, expected to be between 1.3010 and 1.3110.”

Next 1-3 weeks: “There is not much to add to the update from yesterday (11 Aug, spot at 1.3075). As highlighted, last week’s high of 1.3185 is likely a short-term top. The current movement is viewed as part of consolidation phase. For the next couple of weeks, GBP is likely to drift lower but any weakness is viewed as part of a 1.2950/1.3160 range. Looking forward, only a clear break below 1.2950 would indicate that GBP is ready for a deeper pullback.”