GBP/USD: A drop below 1.3580 looks unlikely – UOB
|UOB Group’s FX Strategists noted a sustained drop below 1.3580 in Cable is not favoured in the short-term horizon.
Key Quotes
24-hour view: “GBP dropped to 1.3566 yesterday before staging a robust rebound that sent it back up to 1.3698. The sharp and rapid advance is overbought but there is scope for GBP to test 1.3710 first before a pullback can be expected. For today, the major resistance at 1.3760 is unlikely to come into the picture. Support is at 1.3645 followed by 1.3610.”
Next 1-3 weeks: “We have held the same view since last Thursday (28 Jan, spot at 1.3665) where we highlighted that ‘the bias is tilted to the downside but any weakness is viewed as part of a 1.3580/1.3760 range’. We expected GBP to drift lower but were of the view that ‘a sustained decline below 1.3580 is unlikely’. However, we did not quite anticipate the drop to 1.3566 yesterday (04 Feb) and the subsequent sharp bounce. The price actions have clouded the outlook and only a clear break (daily closing) below 1.3580 or above 1.3760 would indicate that GBP is ready for a sustained directional move.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.