GBP/USD could test 1.2770 near term – UOB

In view of FX Strategists at UOB Group, Cable keeps the bullish stance and could reach the 1.2770 area in the next weeks.

Key Quotes

“Despite the unexpected strong recovery, upward momentum is not strong and any further GBP strength is expected to be slow and grinding. 1.2770 is a major resistance and a sustained move above this level seems unlikely. On the downside, support is at 1.2680 but the more significant level is near yesterday’s low at 1.2630”.

“Upward momentum is showing signs of slowing as GBP continues to grind higher and the partial profit taking level indicated previously at 1.2770 appears to be within reach. A clear break above this level would open up the way for a move to 1.2865 but the odds for such a move do not appears to be very high at this stage. That said, as long as the stoploss at 1.2630 (adjusted from 1.2520) is not taken out, the outlook for GBP is deemed as bullish”.