GBP/USD forecast to keep the 1.3000-1.3250 range – UOB

Cable is likely to trade between 1.3000 and 1.3250 in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that ‘upward momentum has more or less dissipated and the current movement is viewed as part of a consolidation phase’. However, instead of consolidating, GBP plummeted to an overnight low of1.3108 before closing on a weak note (1.3124, -0.75%). While the rapid and sharp drop appears to be overdone, there is room for GBP to dip to 1.3080 first before the current weakness should stabilize. The next support at 1.3040 is likely out of reach. Resistance is at 1.3150 followed by 1.3180.”

Next 1-3 weeks: “After GBP surged earlier this week, we indicated on Wednesday (11 Nov, spot at 1.3265) that ‘further GBP strength appears likely even though it is a bit too soon to expect a move to the year-to-date high at 1.3481’. We added, ‘on a shorter-term note, 1.3380 and 1.3420 are already quite strong resistance levels’. That said, we did not quite expect the sharp drop yesterday (12 Nov) that took out our ‘strong support’ level of 1.3120 (low of 1.3108). The rapid loss in momentum suggests GBP is not ready to move higher just yet. From here, GBP could trade sideways within a broad 1.3000/1.3250 range for a period of time.”