GBP/USD faces a probable move to 1.3160 – UOB

In light of the recent price action, Cable could now move to the 1.3160 region, in opinion pf FX Strategists at UOB Group.

Key Quotes

24-hour view: “After trading in a relatively quiet manner for several days, the sudden and strong surge that propelled GBP to an overnight high of 1.3069 came as a surprise. The rapid advance is running ahead of itself but there is scope for GBP to edge nearer to 1.3100 before the current rally should ease. For today, a sustained move beyond 1.3100 is unlikely. Support is at 1.3015 but only a breach of 1.2990 would indicate the current upward pressure has eased.”

Next 1-3 weeks: “While we noted yesterday (13 Feb, spot at 1.2955) that ‘downward pressure has more or less dissipated’, we expected GBP to ‘trade sideways within a 1.2850/1.3060 range’. However, GBP staged a sudden rally and moved above the top of the range as it touched 1.3069. Despite the strong advance, we do not view the current GBP strength as part of an uptrend. That said, the short-term strength could extend further to 1.3160 in the coming days. In other words, the outlook for GBP is deemed as mildly positive for now. Support is at 1.2990 but only a break of 1.2950 would indicate the upside risk has dissipated.”