GBP/USD now seen within a consolidative range – UOB

In the opinion of FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, GBP/USD seems to have now moved into a consolidative phase, likely between 1.1890 and 1.2055.

Key Quotes

24-hour view: “Our expectations for GBP ‘edge higher’ was incorrect as it dropped sharply but briefly to 1.1891 before rebounding to end the day at 1.2004 (+0.20%). The rebound could extend to 1.2025, in view of the lackluster upward momentum, the major resistance at 1.2055 is unlikely to come into the picture. Support is at 1.1960 followed by 1.1920.”

Next 1-3 weeks: “Three days ago (19 Jul, spot at 1.1945), we held the view that the rebound in GBP could extend to 1.2055. GBP subsequently rose to 1.2044 but yesterday, it dropped below our ‘strong support’ level at 1.1915 (low of 1.1890). The breach of the ‘strong support’ indicates that upward momentum has eased. In other words, GBP is unlikely to rebound further. Instead, GBP appears to have moved into a consolidation phase and is likely to trade within a range of 1.1890/1.12055 for now. Looking ahead, GBP has to break clearly above 1.2055 before a sustained advance is likely.”