GBP/USD scope for a test of 1.2770 – UOB

According to strategists at UOB Group, there is still room for Cable to test the 1.2770 area in the next weeks.

Key Quotes

“The anticipated pull-back extended much lower than expected as GBP dropped to an overnight low of 1.2445. Despite the strong rebound from the low, the undertone still appears weak and a retest of 1.2445 would not be surprising (with lower odds for a move below 1.2400)”.

“Despite the rather sharp pull-back from the recent high of 1.2673, there appears to be room for extension to the next resistance at 1.2770. That said, 1.2673 is acting as a strong short-term resistance and GBP has to reclaim this level within these few days or a break below 1.2400 would indicate that a short-term top is in place”.