GBP/USD sticks to the 1.2950-1.3160 range – UOB

In opinion of FX Strategists at UOB Group, Cable is expected to navigate within the 1.2950-1.3160 range in the next weeks.

Key Quotes

24-hour view: “Our view for GBP yesterday was that it ‘could trade sideways, likely not straying much out of Friday’s 1.3048/1.3143 range’. While our expectation for sideway trading was not wrong, GBP traded within a surprisingly narrow range (between 1.3074 and 1.3121). The underlying tone has improved somewhat and this could lead to GBP edging higher. That said, the prospect for a break of the solid resistance at 1.3160 is not high (1.3130 is already quite a strong level). On the downside, a breach of 1.3075 would indicate the current mild upward pressure has eased.”

Next 1-3 weeks: “Last Tuesday (11 Aug, spot at 1.3075), we indicated that ‘a short-term top is in place’ and held the view that GBP ‘is likely to drift lower but any weakness is viewed as part of a 1.2950/1.3160 range’. However, aside from a brief dip to 1.3006, GBP traded mostly sideways before popping to a high of 1.3143 last Friday. The mild downward pressure has eased but the current movement is still viewed as part of a consolidation phase. In other words, we continue to hold the view that GBP is trading within a 1.2950/1.3160 range.”