GBP/USD remains focused on 1.3780 – UOB

In opinion of FX Strategists at UOB Group, Cable risks a deeper pullback if 1.3780 is cleared in the next weeks.

Key Quotes

24-hour view: “Yesterday, we held the view that there is room for GBP to ‘test 1.3780 first before a recovery can be expected’. Our expectation did not materialize as GBP traded between 1.3819 and 1.3877. The underlying tone has improved slightly and this could lead to GBP testing 1.3895 first before easing. The next resistance at 1.3930 is not expected to come into the picture. Support is at 1.3830 followed by 1.3800.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (22 Mar, spot at 1.3840). As highlighted, ‘downward momentum is beginning to improve but GBP has to close below the month-to-date low near 1.3780 before a sustained decline can be expected’. At this stage, the prospect for such a move is not high but it would increase unless GBP can move above 1.3930 within these few days. Looking ahead, the next support level of note below 1.3780 is at 1.3700.”