GBP/USD remains neutral, back to a consolidative mode – UOB

Cable’s outlook remains neutral and it is expected to extend the near term consolidation, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “The anticipated weakness in GBP exceeded our expectation as GBP cracked the strong 1.3900 support and hit a low of 1.3858. Despite the bounce from the low, the undertone is still weak and a retest of the strong 1.3855/60 support seems likely. At this stage, a sustained move below this level is not expected. Resistance is at 1.3950 followed by yesterday’s high near 1.3995. The latter level is expected to be strong enough to cap any intraday recovery”.

Next 1-3 weeks: “GBP rose strongly to hit a high of 1.4070 yesterday before easing off quickly to end unchanged for the day. The breach of the strong 1.4020 resistance indicates that the recent mild downward pressure has eased. The neutral phase that started a month ago (30 Jan, spot at 1.4075) remains intact and GBP is deemed to have moved back into a range-trading mode, expected to be within a 1.3860/1.4100 range”.