GBP/USD seen sidelined between 1.3010/1.3130 – UOB

FX Strategists at UOB Group expect Cable to trade within a consolidative theme in the very near term.

Key Quotes

24-hour view: “GBP rose initially to a high of 1.3150 but Brexit headlines after NY close sent it plummeting to 1.3030. Despite the quick bounce from the low, it is too soon to expect a sustained rebound. GBP is more likely to consolidate and trade sideways to slightly lower from here. Expected range for today, 1.3010/1.3130”.

Next 1-3 weeks: “GBP rose to 1.3150 yesterday, just below the 1.3160 ‘key resistance’. The subsequent pullback from the high and the sharp drop after NY close (low of 1.3030 at the time of writing) suggests that the near-term risk is still tilted to the downside. As highlighted yesterday (01 Apr, spot at 1.3025), the “risk of a break of 1.2950 has increased” and would continue to increase unless GBP can move above the ‘key resistance’. Looking ahead, a break of 1.2950 would suggest GBP has room to move to 1.2880”.