GBP/USD room for a re-test of 1.3185/80 – UOB

In view of FX Strategists at UOB Group, there is scope for Cable to re-visit the 1.3185/80 band.

Key Quotes

24-hour view: “While we expected a higher GBP yesterday, we were of the view that “1.3335/40 could be just out of reach”. In line with expectation, GBP touched a high of 1.3329 but the subsequent sharp and rapid decline from the top came as a surprise. The sharp drop appears to have scope to retest the overnight low near 1.3180/85 but the next support at 1.3150 is major level and is unlikely to yield so easily. Resistance is at 1.3255 but the stronger level is closer to 1.3290. The 1.3329 high is not expected to come into the picture for now”.

Next 1-3 weeks: “While GBP hit a fresh high of 1.3329 yesterday, the subsequent sharp decline from the top was unexpected. The overnight low of 1.3185 is not that far from the trailing stop-loss for our bullish view at 1.3150. From here, the odds for further up-move have diminished unless GBP can reclaim 1.3290 within these few days. In the meanwhile, GBP has likely moved into a short-term consolidation phase and could trade sideways for the next few days. Until 1.3150 is taken out, another push higher is not ruled out just yet”.