GBP/USD COULD NOW MOVE INTO A CONSOLIDATIVE PHASE – UOB

According to FX Strategists at UOB Group, Cable is now seen navigating the 1.3460-1.3680 range in the next weeks.

KEY QUOTES

24-hour view: “Our expectations for GBP to ‘trade sideways’ were incorrect as it rebounded to a high of 1.3576 during NY session. The rebound appears to be running ahead of itself and GBP is unlikely to advance much further. For today, GBP is more likely to trade between 1.3510 and 1.3590.”

Next 1-3 weeks: “Our latest narrative was from last Thursday (30 Sep, spot at 1.3435) where we indicated that GBP ‘is still weak and a break of 1.3370 would shift the focus to 1.3300’. We added, ‘the current negative outlook is deemed intact as long as GBP does not move above 1.3570’. We did not anticipate the strong rebound on Friday (01 Oct) that broke 1.3570 (high of 1.3576). The break of 1.3570 indicates that the weakness in GBP has run its course. The current movement is viewed as part of a consolidation phase and GBP could trade within a 1.3460/1.3680 range for now.”