Diminishing odds for extra GBP strength – UOB

Pablo Piovano FXStreet

FX Strategists at UOB Group suggested further upside in Cable could be losing momentum.

Key Quotes

24-hour view: “We highlighted last Friday GBP “could retest the overnight high of 1.2560 but clear break of his level is unlikely”. We added, “there is another strong resistance at 1.2580”. GBP subsequently touched 1.2582 briefly before plummeting to a low of 1.2460. While the decline appears to be running ahead of itself, there is scope for GBP to edge lower towards 1.2430. At this stage, a clear break of 1.2430 is unlikely (next support is at 1.2400). On the upside, only a move back above 1.2530 (minor resistance is at 1.2500) would indicate that the current soft patch in GBP has stabilized. Higher up, the 1.2580 level remains as a very solid resistance”.

Next 1-3 weeks: “We highlighted last Friday (20 Sep, spot at 1.2525) that “the recovery phase that started about 2 weeks ago (05 Sep, spot at 1.2245) is deep in overbought territory”. We added, “GBP has to ‘punch’ through 1.2580, otherwise, if GBP were to ‘hang around’ these elevated levels, the risk of a short-term top would increase quickly”. While GBP touched 1.2582, the subsequent sharp and rapid decline to a low of 1.2460 was not exactly expected. For now, the recovery phase is deemed as intact but the odds for further GBP strength have clearly diminished. Unless GBP can move and stay above 1.2530 within these few days, a break of 1.2430 (no change in ‘strong support level’) would indicate that the recovery phase has run its course and that 1.2582 is a short-term top”.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.