GBP/USD could attempt a move to 1.3160 – UOB

Cable’s outlook is slightly positive, and the upside bias could extend to the 1.3160 region in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Expectation for GBP to ‘edge nearer to 1.3100 before easing’ did not materialize as it traded in a relatively quiet manner between 1.3001 and 1.3063 before settling little change at 1.3046 (+0.04%). The underlying tone is on the firm side and this would likely translate into a higher trading range of 1.3015/1.3080 (a sustained advance above 1.3085 is not expected).”

Next 1-3 weeks: “While we noted yesterday (13 Feb, spot at 1.2955) that ‘downward pressure has more or less dissipated’, we expected GBP to ‘trade sideways within a 1.2850/1.3060 range’. However, GBP staged a sudden rally and moved above the top of the range as it touched 1.3069. Despite the strong advance, we do not view the current GBP strength as part of an uptrend. That said, the short-term strength could extend further to 1.3160 in the coming days. In other words, the outlook for GBP is deemed as mildly positive for now. Support is at 1.2990 but only a break of 1.2950 would indicate the upside risk has dissipated.”