GBP/USD: Declining bets for a move to 1.2550 – UOB

Cable keeps the positive view unchanged for the time being, although a test of the mid-1.2500s looks unlikely for the time being, according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our expectation for GBP to ‘edge above Monday’s high of 1.2484’ did not materialize as it traded in a relatively narrow range between 1.2331 and 1.2450. The price action offers no fresh clues and GBP could trade sideways between 1.2300 and 1.2490 for now.”

Next 1-3 weeks: “After rising quickly to 1.2484 last Friday (27 Mar), GBP has not been able to make much headway on the upside as it traded in a relatively quiet manner over the last few days. For now, we are holding on to our view that the ‘current recovery has scope to extend higher but prospect for a move above 1.2550 is not high’. To look at it another way, there is chance for GBP to test 1.2550 first before a pull-back can be expected. On the downside, a breach of 1.2200 (‘strong support’ previously at 1.2100) would indicate the current upward pressure has dissipated.”