GBP/USD: Selling pressure looks mitigated – UOB

In opinion of FX Strategists at UOB Group, Cable is now likely to move within the 1.3860-1.4070 range in the next week.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the rebound in GBP has scope to extend but any further advance is likely limited to a test of 1.3995’. We added, ‘the next resistance at 1.4035 is unlikely to come into the picture’. GBP subsequently rose to 1.4006 before easing off. Downward momentum has improved a tad and GBP could edge lower to 1.3890. In view of the lackluster momentum, the odds for an extension to 1.3860 are not high. Resistance is at 1.3970 followed by 1.4000.”

Next 1-3 weeks: “On Monday (01 Mar, spot at 1.3975), we held the view that GBP ‘is in a corrective pullback’ and ‘any weakness is likely limited to 1.3850’. While GBP declined as expected, it rebounded strongly after touching 1.3860 yesterday. Downward momentum has more or less dissipated and GBP could trade between 1.3860 and 1.4070 for now.”