GBP/USD still faces further consolidation – UOB

Cable is still seen navigating within the 1.2150/1.2350 range, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that Wednesday’s low of ‘1.2201 could be a short-term bottom’ and expected GBP to trade between 1.2220 and 1.2320. GBP subsequently posted a range of 1.2234/1.2346, higher than our expected range. The relatively firm daily closing in NY (1.2317, +0.44%) has resulted in an up tick in momentum. From here, GBP could edge above 1.2350 but the prospect for a sustained rise beyond 1.2380 is not high. The current slightly positive outlook is deemed as intact unless GBP moves below 1.2260 (minor support is at 1.2285).”

Next 1-3 weeks: “The rapid manner by which GBP gave up most of its gains from Tuesday came as a surprise. Our expectation from yesterday (27 May, spot at 1.2315) for GBP to trade with an upward bias towards 1.2400 was proven wrong as GBP dropped below the ‘strong support’ level of 1.2230 (low of 1.2201). The sharp but short-lived swings have resulted in mixed outlook. From here, GBP could continue to trade in a choppy manner, likely within a 1.2150/1.2350 range.”