The British pound has been on the ascent as the chances of a hard Brexit are diminishing. Where next?
Here is their view, courtesy of eFXdata:
UOB discusses GBP/USD technical outlook and flags a scope of recent rebound to extend towards 1.2780.
“In the first week of Sep 2019, GBP/USD dropped to a fresh multi-year low of 1.1959 before staging an outsized rebound and closed sharply higher. The price action appears to be similar to those in April 2019 and Jan 2017. The strong advance from the Jan 2017 low lasted slightly more than a year but the extent of the recovery from the April 2019 low was relatively limited, both time and price wise,” UOB notes.
“While it is premature to expect a sustained rise from here, GBP/USD appears to be trying to form a bottom but further advance is expected to face solid resistance at 1.2780. On the downside, a break back below 1.1959 could lead to further GBP/USD weakness even though a revisit of the Oct 2016 ‘flash-crash’ low near 1.1500 appears unlikely (there is another support at 1.1800),” UOB adds.
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