GBP/USD faces some consolidation near term – UOB

Cable is predicted to move into a consolidative phase in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that ‘there is room for GBP to advance to 1.3695, possibly 1.3715’. The subsequent advance exceeded our expectations as GBP rose to 1.3734. However, GBP pulled back sharply from the high. The pullback has room to extend but any weakness is likely limited to a test of 1.3645. The strong support at 1.3595 is not expected to come into the picture. Resistance is at 1.3695 followed by 1.3715.”

Next 1-3 weeks: “Yesterday, we highlighted that GBP ‘is likely to head higher to 1.3715’. We added, ‘a break of 1.3715 would shift the focus to 1.3750’. We did not quite expect the rapid manner by which GBP moved above 1.3715 as it popped to 1.3734 during London hours before retreating. There is no change in our view for now but GBP could consolidate for a couple of days first before heading higher. Only a break of the ‘strong support’ at 1.3595 (no change in level) would indicate that 1.3750 is out of reach.”