GBP/USD seen within a 1.2760/1.2830 range near term – UOB

In opinion of FX Strategists at UOB Group, Cable is seen sticking to the consolidative theme between 1.2760 and 1.2830 in the very near term.

Key Quotes

24-hour view: “Our view for GBP last Friday was it “could below move 1.2800 again even though the next support at 1.2770 could be just out of reach for today”. However, GBP edged one pip below 1.2770 (low of 1.2769) before recovering. While downward pressure is beginning to ease, it is too early to expect a sustained rebound. From here, there is room for GBP to dip below 1.2770 but any weakness is viewed as a lower trading range of 1.2760/1.2830 (a sustained decline is not expected)”.

Next 1-3 weeks: “GBP ‘probed’ the bottom of our expected 1.2770/1.2930 range last Friday as it touched 1.2769 before recovering. From here, there is not much to add to our update from early Friday (08 Nov, spot at 1.2820). As highlighted, the “risk of a deeper pull-back in GBP has increased” and a “NY closing below 1.2770 could lead to further GBP weakness to 1.2700”. On the upside, only a move above 1.2865 (‘strong resistance’ level was at 1.2885 last Friday) would indicate the current downward pressure has eased”.