GBP/USD bullish, now targets 1.3045 – UOB

FX Strategists at UOB Group have shifted their outlook on Cable to bullish from neutral, now expecting a potential test of 1.3045 in the near term.

Key Quotes

“The anticipated GBP strength exceeded our expectation as the strong 1.2920 level was easily taken out (overnight high of 1.2971). The rally is severely over-extended but with no sign of weakness just yet, another push higher towards the month-to-date high of 1.2985 seems likely. This is a rather strong level and is expected to offer solid resistance (next resistance is much higher up at 1.3045/50). Support is at 1.2900 followed by 1.2860”.

“We indicated yesterday that “the immediate pressure is clearly on the upside but at this stage, a sustained move above the trend-line resistance at 1.2920 seems unlikely”. Thanks to Carney, GBP sliced through 1.2920 with ease and surged to hit an overnight high of 1.2971. The neutral outlook has shifted to bullish and the target from here is for a move towards the year-to-date high near 1.3045/50. In view of the overbought short-term conditions, those looking to buy may like to wait for a dip to 1.2900/05 to initiate long with a stop-loss at 1.2840”.