GBP/USD now faces some consolidation – UOB

In view of FX Strategists at UOB Group, Cable has now moved into a consolidation phase.

Key Quotes

24-hour view: “GBP closed higher by +0.59% (NY close of 1.3118) as it recovered some of last Friday’s steep loss. The price action is deemed as part of an on-going consolidation phase. In other words, GBP is expected to trade sideways from here, albeit likely at slightly higher range of 1.3085/1.3180″.

Next 1-3 weeks: “In our last update, we expected GBP to extend its gains to the July’s peak of 1.3363. GBP subsequently staged an outsized decline that easily took out the 1.3170 ‘key support’ (low of 1.3041 on Friday). While there is no change to the neutral outlook, the break of the ‘key support’ indicates that GBP has likely made a short-term top at 1.3295 last week. The current movement is viewed as the early stages of a consolidation phase and GBP is expected to trade sideways to slightly lower from here, likely within a broad 1.3020/1.3220 range”.