GBP/USD could have charted an interim bottom – UOB

Cable could now move into a consolidative fashion, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted last Friday that ‘downward momentum has eased’ but were of the view ‘there is scope for GBP to test 1.2840 first before a more sustained recovery can be expected’. However, GBP recovered sooner and from a higher level than expected (low of 1.2876). From here, the rapid rebound appears to have scope to retest Friday’s 1.2980 peak but the next resistance at 1.3010 is unlikely to come into the picture. Support is at 1.2920 followed by 1.2885.”

Next 1-3 weeks: “The downward pressure that last Thursday (20 Feb, spot at 1.2920) ended abruptly as GBP rebounded above the ‘strong resistance’ level of 1.2960 (high of 1.2980). For now, last week’s 1.2849 low is viewed as an interim bottom and the current price action is likely part of a consolidation phase. In other words, GBP is expected to trade sideways between 1.2850 and 1.3030.”