GBP/USD further rangebound lies ahead – UOB

According to FX Strategists at UOB Group, Cable now faces some consolidation in the near term, all within the current neutral stance.

Key Quotes

24-hour view: “The sharp rise in GBP and the subsequent equally swift drop from a high of 1.4070 was clearly not expected. The choppy swing has resulted in a mixed outlook even though the rapid decline appears to have room to dip below the overnight low of 1.3929. That said, the next support at 1.3900 is a major level and is unlikely to be seriously threatened. Resistance is at 1.4000 ahead of 1.4030. The 1.4070 high is likely ‘safe’ for now”

Next 1-3 weeks: “GBP rose strongly to hit a high of 1.4070 yesterday before easing off quickly to end unchanged for the day. The breach of the strong 1.4020 resistance indicates that the recent mild downward pressure has eased. The neutral phase that started a month ago (30 Jan, spot at 1.4075) remains intact and GBP is deemed to have moved back into a range-trading mode, expected to be within a 1.3860/1.4100 range”.