GBP/USD faces further consolidation near term – UOB

Cable remains poised to extend the 1.3640-1.3850 range for the time being, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our expectations for GBP to ‘break 1.3800’ yesterday was incorrect as it fell sharply from 1.3767 (low has been 1.3690). While downward momentum has not improved by much, the decline has room to extend lower to 1.3670. The major support at 1.3640 is unlikely to come under threat. Resistance is at 1.3725 followed by 1.3750.”

Next 1-3 weeks: “On Tuesday (24 Aug, spot 1.3720), we highlighted that GBP is likely to consolidate and trade between 1.3640 and 1.3850 for a period of time. We continue to expect GBP to consolidate even though the slightly weakened underlying tone suggests that the downside risk is greater. That said, GBP has to close below 1.3640 before a sustained decline can be expected.”