GBP/USD could see some weakness near term – UOB

Cable is seen coming in under some selling pressure in the near term, according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our anticipation for GBP to stage another leg higher to test the 1.3070 did not pan out as it only managed to reach 1.3028. The rapid pace and extent of the pull-back came as a surprise as GBP dropped sharply and extended its decline upon opening earlier this morning (low of 1.2892 during Sydney hours). While the swift down-move is running ahead of itself, there is scope for GBP to test the 1.2865 support first before stabilization can be expected. Resistance is at 1.2950 but the stronger level is at 1.2980”.

Next 1-3 weeks: “The sharp and rapid drop in GBP last Friday (and earlier this morning during Sydney hours) came as a surprise. Our previous expectation for a stronger rebound to 1.3150 was wrong. From here, last week’s 1.3043 peak is viewed as a short-term top and we expect GBP to trade sideways to slightly lower for the next 1 to 2 weeks, likely within a 1.2800/1.3010 range”.