GBP/USD upside appears limited above 1.2800 – UOB

Further gains in Cable appear somewhat limited in the near term, according to FX Strategists at UOB Group.

Key Quotes

“We noted yesterday that 1.2770 is a major resistance and a sustained move above this level is unlikely. GBP touched a high of 1.2775 before dropping quickly to end the day at 1.2678. The 1.2775 peak is viewed as a short-term top and the current pull-back appears to have scope to extend further but 1.2625/30 is a strong support and at this stage, a clear break below this level seems unlikely”.

“The partial profit taking level of 1.2770 that was indicated two days ago was met as GBP touched a high of 1.2775 yesterday. As noted, this is a major resistance and while technically the next resistance is at 1.2865, the odds for further GBP strength are not high. That said, confirmation of a short-term top is only upon a move below 1.2630 (a breach of this level would indicate the start of a consolidation phase)”.