GBP/USD: DWINDLING BETS FOR A MOVE TO 1.3645 – UOB

FX Strategists at UOB Group noted a near-term move to 1.3645 in Cable appears to be losing traction.

KEY QUOTES

24-hour view: “Yesterday, we expected to GBP to ‘trade sideways within a range of 1.3515/1.3575’. However, GBP popped to a high of 1.3590 before dropping back down to end the day little changed at 1.3536 (-0.08%). The underlying has softened somewhat and the bias is on the downside. That said, any weakness is unlikely to break the strong support at 1.3485 (minor support is at 1.3515). Resistance is at 1.3555 followed by 1.3580.”

Next 1-3 weeks: “We have held the same view since Monday (07 Feb, spot at 1.3530). As highlighted, while upward momentum is beginning to wane, there is chance, albeit not a high one for GBP to make one more push higher to 1.3645. There is no change in our view for now even though after trading sideways for a few days, upward momentum has waned further and the chance for GBP to push higher to 1.3645 has diminished considerably. In order to rejuvenate the flagging momentum, GBP has to move and stay above 1.3590 within these 1 to 2 days or a break of 1.3490 (‘strong support’ level was at 1.3470 yesterday) would indicate that GBP is not ready to head higher to 1.3645.”