GBP/USD scope for a test of 1.3020 – UOB

FX Strategists at UOB Group believe Cable’s recovery could extend to the 1.3020 region in the next weeks.

Key Quotes

24-hour view: “GBP rebounded strongly last Friday before extending its gain to hit a high of 1.2946 during early Sydney’s hours. Further strength is not ruled out but the rally is clearly over-extended and while a move above 1.2946 would not be surprising, the odds for extension above the next resistance at 1.2980 are not high. On the downside, support is at 1.2875 followed by 1.2840. The latter level is likely strong enough to hold, at least for today”.

Next 1-3 weeks: “After moving 1 pip below the revised target of 1.2775 last Thursday (low of 1.2774), GBP staged a surprisingly robust recovery that took out the bearish stop-loss at 1.2870 on Friday. The 3-week bearish phase has ended and while the outlook for this pair is viewed as neutral, the current strong rebound has scope to extend higher to 1.3020. At this stage, a sustained move above this level is not expected. On the downside, only a move back below 1.2810 would indicate that the upward pressure has eased”.