GBP/USD clings to the neutral bias – UOB

FX Strategists at UOB Group believes Cable could visit the 1.3265/70 band in the next weeks.

Key Quotes

24-hour view: “We highlighted yesterday that “a move towards 1.3345 would not be surprising but a clear break below 1.3310 seems unlikely”. GBP touched a low of 1.3344 before staging a surprisingly strong rebound. The recovery appears to have scope to extend higher but at this stage, a clear break above 1.3485/90 seems unlikely. Support is at 1.3400 followed by 1.3375. The low near 1.3345 is likely ‘safe’ for today”.

Next 1-3 weeks: “When we shifted from a bullish to neutral stance on Tuesday (26 Sep) we were of the view that GBP has moved into a consolidation phase. The drop below the expected 1.3370/1.3600 consolidation range (low of 1.3364 yesterday) suggests that the current pullback has room to extend lower towards the major support at 1.3265/70. At this stage, the odds for a sustained move below this level are not yet. Overall, GBP is expected to stay on the defensive in the coming days unless it can reclaim 1.3485”.