GBP/USD faces extra consolidation near term – UOB

FX Strategists at UOB Group noted Cable has now moved into a consolidative phase.

Key Quotes

24-hour view: “GBP traded in a quiet manner last Friday between 1.2928 and 1.2973, narrower than our expected sideway-trading range of 1.2895/1.2965. The price action is still viewed as part of a consolidation phase. In other words, GBP is expected to continue to trade sideways for now, albeit likely at a lower range of 1.2900/1.2965”.

Next 1-3 weeks: “Last Friday (01 Nov), GBP traded in a subdued manner and within a relatively narrow range (between 1.2928 and 1.2973) before ending the day unchanged at 1.2938. The price action is in line with our view from last Tuesday (29 Oct, spot at 1.2855) wherein GBP is “expected to trade sideways for now”. As highlighted, further GBP strength is not ruled out but the recent peak around 1.3000/1.3010 is ‘high-water mark’ and would be a tough level to crack. Meanwhile, GBP could trade sideways within a 1.2800/1.3000 range for a while more”.