GBP/USD stays bearish near term – UOB

FX Strategists at UOB Group remain bearish on Cable in the short term, expecting a test of the 1.2585/80 region.

Key Quotes

“We have been bearish GBP since last Tuesday. After trading sideways to higher for several days, GBP finally succumbed to selling pressure and is currently approaching the major support near 1.2580/85”.

“We suggested 1.2735/40 as ‘better selling levels’ last Tuesday and as this pair move towards the strong support, those who are short GBP may like to exit half of their position at 1.2580/85”.

“A move below 1.2580/85 would not be surprising but this level is unlikely to yield so easily. The next support is further down at 1.2515, the low on the day that UK election was announced. Stop-loss is adjusted lower to 1.2720 (below entry level) even though on a shorter-term note, 1.2695 is already a rather strong resistance”.