GBP/USD still faces further rangebound near-term – UOB

Cable is still seen navigating within the 1.3810-1.4020 range in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that GBP ‘could edge higher and test 1.3970’. We added, ‘a sustained rise above this level is unlikely’. While our expectation was not wrong, the subsequent GBP strength exceeded our expectation as GBP rose to a high of 1.3996. Upward momentum has improved and GBP could strengthen further but overbought conditions suggest that any advance is unlikely able to maintain a foothold above the major resistance at 1.4020. Next resistance is at 1.4070. Support is at 1.3950 but only a break of 1.3910 would indicate that the current upward pressure has eased.”

Next 1-3 weeks: “Yesterday (11 Mar, spot 1.3930), we indicated that ‘the current mild downward pressure in GBP has dissipated’ and we expected GBP to ‘trade between 1.3810 and 1.4020’. There is no change in our view even though shorter-term momentum has improved somewhat. While GBP could move above 1.4020, it has to close above 1.4070 before a sustained advance can be expected. At this stage, the odds for a sustained rise in GBP is not high.”