GBP/USD keeps the neutral stance – UOB

FX Strategists at UOB Group remain neutral on Cable although the door still stays open for a test of 1.2480 in the next weeks.

Key Quotes

“The sharp pull-back was unexpected as GBP dropped quickly to touch an overnight low of 1.2254. The weak daily closing suggests strong downward pressure but at this stage, any further decline appears to be limited to 1.2200”.

“The sharp pull-back after the spectacular rally on Tuesday was unexpected. As noted yesterday, as long as 1.2240 is intact, the current GBP strength appears to have scope to extend higher to test the major resistance at 1.2480 (declining trend-line on the daily chart). A move below 1.2240 would indicate that the immediate upward pressure has eased and the start of sideway consolidation phase”.