GBP/USD now moved into a consolidative phase – UOB

Cable is now seen navigating within the 1.3810-1.4020 in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that GBP ‘could retest the 1.3925/30 level’. We added, ‘a breach of this strong resistance is not ruled out but 1.3970 is not expected to come into the picture’. Our view was correct as GBP rose to 1.3936 before settling near the high at 1.3935 (+0.33%). Upward momentum has improved, albeit not by much. From here, GBP could edge higher and test 1.3970. A sustained rise above this level is unlikely (next resistance is at 1.4020). On the downside, a breach of 1.3860 (minor support is at 1.3895) would indicate the current mild upward pressure has eased.”

Next 1-3 weeks: “We have held a negative view in GBP since late last week. Yesterday (10 Mar, spot at 1.3880), we highlighted that ‘downward momentum has waned and a break of 1.3930 would indicate that the current mild downward pressure in GBP has dissipated’. GBP breached 1.3930 during NY session (high of 1.3936) and the downside risk has dissipated. The current movement is viewed as the early stages of a consolidation phase and GBP is likely to trade between 1.3810 and 1.4020 for now.”