GBP/USD faces strong support around 1.3660 – UOB

Cable’s negative phase remains unchanged while below the 1.3810 level, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Yesterday, we highlighted that ‘there is scope for the weakness in GBP to test 1.3660 first before stabilizing’. However, GBP rebounded after touching 1.3671. The rapid and robust rebound has scope to extend higher but any advance is expected to face solid resistance at 1.3780. The major level at 1.3810 is unlikely to come into the picture. Support is at 1.3710 followed by 1.3680.”

Next 1-3 weeks: “We turned negative on GBP earlier this week. In our latest narrative from yesterday (25 Mar, spot at 1.3690), we indicated that ‘the negative phase is deemed intact as long as GBP does not move above 1.3810 (‘strong resistance’ level)’. While there is no change in our view, shorter-term downward momentum has waned somewhat and the support at 1.3660 may not come into the picture so soon and the odds for the weakness in GBP to extend to 1.3600 have diminished. Looking ahead, a break of the ‘strong resistance’ at 1.3810 would indicate that GBP could trade sideways for a period of time.”