GBP/USD seen sidelined near term – UOB

In opinion of FX Strategists at UOB Group, a short-short term top is now in place for Cable and it is now likely to remain sidelined.

Key Quotes

24-hour view: “GBP traded in a relatively quiet manner before settling slightly higher at 1.2860 (+0.19%). The price action is viewed as an on-going consolidation phase and GBP is likely to continue to trade sideways. Expected range for today, 1.2820/1.2900”.

Next 1-3 weeks: “We indicated in our last update on 23 Oct (spot at 1.2875) that “GBP could ill afford to dither below 1.3000 or the risk of a short-term top would increase rapidly”. Since then, GBP traded sideways to slightly lower and upward pressure has dissipated. The positive phase that started earlier this month has likely made a short-term top at 1.3012 last week. Looking ahead, further GBP strength is not ruled out even though the 1.3000/10 level is acting as a ‘high-water mark’ and would be a tough level to crack. Meanwhile, GBP is expected to trade sideways, likely within a broad 1.2700/1.3000 range”.