GBP/USD still seen within 1.3700-1.3855 – UOB

In opinion of FX Strategists at UOB Group, Cable could now trade in a rangebound pattern between 1.3700 and 1.3855.

Key Quotes

24-hour view: “The sharp and rapid manner by which GBP plummeted to a low of 1.3768 during NY session came as a surprise (we were expecting GBP to trade sideways). Further GBP weakness seems likely even though oversold conditions could ‘limit’ any decline to a test of 1.3750. The major support at 1.3700 is not expected to come under threat. Resistance is at 1.3795 followed 1.3820.”

Next 1-3 weeks: “Yesterday (07 Sep, spot at 1.3840), we highlighted that ‘there is still room for GBP to advance to 1.3910’. We added, ‘only a break of 1.3790 would indicate that the current upward momentum has fizzled out’. The subsequent sharp decline in GBP that cracked 1.3790 (low of 1.3768) came as a surprise. Upward momentum has fizzled out and GBP has likely moved into a consolidation phase. From here, GBP could trade between 1.3700 and 1.3855 for a period of time.”