GBP/USD bearish, supported around 1.2080 – UOB

FX Strategists at UOB Group have shifted their outlook to bearish for Cable, adding that strong support should emerge in the 1.2080 area in the short term.

Key Quotes

“The rapid acceleration lower yesterday was unexpected as GBP easily took out several strong supports”.

“While the neutral outlook has shifted to bearish, strong support can be expected near 1.2085/90 (this level was tested twice after the flash crash in October last year but held). The next key level is closer to 1.2000”.

“In order to maintain the current momentum, any short-term rebound should not move back above 1.2290 even though 1.2250 is already a strong short term resistance”.

“Overall, the reward to risk ratio to sell at current level (and the potential downside) is not as attractive as GBP/SGD.”