GBP/USD underlying tone improved – UOB

FX Strategists at UOB Group noted Cable is still seen within a consolidation phase in the near term.

Key Quotes

24-hour view: “GBP traded in a volatile manner yesterday, swinging between a 1.3309/1.3390 range before ending the day largely unchanged (close at 1.3377). The messy price action has resulted in a mixed outlook and further choppy trading is expected from here, albeit likely at a higher range of 1.3340/1.3425”.

Next 1-3 weeks: “GBP dipped to a low of 1.3309 yesterday before rebounding quickly to end the day little changed at 1.3377 (+0.03%). The price action is line with our view wherein we expect GBP to trade sideways between 1.3250 and 1.3470. That said, the underlying undertone has improved somewhat and the bias for the next several days is for GBP to grind higher towards 1.3470. At this stage, any GBP strength is viewed as part of a 1.3290/1.3470 consolidation range (narrowed from the 1.3250/1.3470 range expected previously) and not the start of a sustained up-move”.