GBP/USD rangebound between 1.3700/1.3900 – UOB

Cable stays neutral and is likely to keep the trade within the 1.37/1.39 range in the next weeks, according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “Expectation for a higher GBP was wrong as it plummeted to hit an overnight low of 1.3781. While further weakness is not ruled out, the decline appears to be running “too fast, too soon” and a sustained break below 1.3760 seems unlikely (next support is at last week’s low near 1.3715). On the upside, only a move back above 1.3875 would indicate that the current weakness has stabilized. Minor resistance is at 1.3850”.

Next 1-3 weeks: “After edging higher for the past several days, the sudden and sharp swing lower yesterday came as a surprise. Upward pressure has eased as GBP took out the strong 1.3800 support (overnight low of 1.3781). While the immediate bias appears to be tilted to the downside, any weakness is viewed as part of a 1.3700/1.3900 consolidation range and not the start of a sustained down-move. Only a clear break of 1.3700 would indicate that the start of a fresh bearish phase”.