GBP/USD outlook shifted to neutral – UOB

FX Strategists at UOB Group have shifted Cable’s outlook to neutral from bullish in the near term.

Key Quotes

24-hour view: “We highlighted yesterday that “the weak undertone suggests a retest of last Friday’s low near 1.3450”. The anticipated weakness exceeded our expectation by touching a low of 1.3432 before recovering. Despite the rebound, the undertone remains weak and another push lower towards 1.3420 seems likely (before a more sustained recovery can be expected). The support below 1.3420 is closer to 1.3370). Resistance is at 1.3510 followed by 1.3550. The 1.3570 high registered yesterday is likely ‘safe’ for now”.

Next 1-3 weeks: “We have highlighted the “diminished odds” for further GBP strength in recent updates and the breach of the stop-loss for our bullish view at 1.3440 yesterday (low of 1.3432) was not surprising. In other words, the bullish phase that started about 2 weeks ago (08 Sep, spot at 1.3100) has ended. The current movement is viewed as the start of a consolidation phase and GBP is expected to trade sideways from here, likely between 1.3370 and 1.3600”.