GBP/USD outlook shifted to neutral – UOB

FX Strategists at UOB Group have shifted their perspective on Cable to neutral from bullish.

Key Quotes

“Last week’s peak at 1.2965 continues to act as a strong resistance as GBP eased off quickly from a high of 1.2948. The recent upward pressure has eased and the current pullback is expected to extend lower towards 1.2840 (next support at 1.2800). Resistance is at 1.2910 and the high near 1.2950 is likely strong enough to cap for the day”.

“While the stop-loss for the bullish phase that started 2 weeks ago is still intact at 1.2850, the weak daily closing yesterday is enough to indicate that the 1.2965 peak seen last Friday is a short-term top. The current price action is viewed as the start of a consolidation phase even though the immediate bias is for a probe lower towards the bottom of the expected 1.2750/1.2950 sideway trading range”.