GBP/USD upside pressure alleviated below 1.4080 – UOB

FX Strategists at UOB Group remain neutral on Cable, adding that a break below 1.4080 should indicate that the upside pressure has eased.

Key Quotes

24-hour view: “Expectation for sideway trading was wrong as GBP continues to grind higher and hit a high of 1.4188. While the up-move appears to be over-stretched, there is scope for a move above the strong 1.4200 resistance but any advance is unlikely to be sustained. For now, we do not expect last month’s peak near 1.4245 to be threatened (1.4220 is already quite a strong level). Support is at 1.4150 but only a move back below 1.4120 would indicate that a short-term top is in place”.

Next 1-3 weeks: “As highlighted yesterday, there is “scope for GBP to test the strong 1.4200 resistance”. This level appears to be within reach even though the pace of the up-move is more rapid than expected. That said, we continue to hold the view that a sustained up-move is unlikely. An intraday move above 1.4200 would not be surprising but last month’s 1.4244 peak is a major resistance and is unlikely to be seriously challenged. On the downside, support is at 1.4120 but only a move back below 1.4080 would indicate that the current mild upward pressure has eased”.