GBP/USD could re-test the 1.2700 region – UOB

FX Strategists at UOB Group believe Cable could slip back to the 1.2700 area in the next weeks.

Key Quotes

“We indicated yesterday that “there is scope for a push higher towards 1.2790” and “however, the next resistance at 1.2820 is unlikely to come into the picture”. GBP hit 1.2820 briefly before reversing its gains quickly. The rapid pull-back from the high appears to have room to extend lower but at this stage, a sustained move below 1.2705 is not expected (next support at 1.2670)”.

“The stop-loss for our bearish view at 1.2820 was tested yesterday but held (exact high of 1.2820). The bearish phase that started on Tuesday, 13 Jun is still intact. As long as 1.2820 is not taken out, we continue to hold a bearish stance and expect GBP to move lower to 1.2560. However, the recent low near 1.2635 is expected to offer strong support and this level could hold for several days more”.