Extra downside in GBP/USD loses momentum – UOB

The prospects of further downside in Cable appear to have lost some traction as of late, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “GBP rose to a 1-week high of 1.3083 before ending the day on a firm note at 1.3076 (+0.28%). Upward momentum remains positive and from here, GBP could continue to advance towards 1.3105. For today, the next resistance at 1.3130 is likely out of reach. Support is at 1.3045 but only a breach of 1.3020 would indicate the current upward pressure has eased.”

Next 1-3 weeks: “GBP closed higher for the third straight day yesterday (16 Jan). While the ‘strong resistance’ level of 1.3130 is still intact, the price action suggests the risk for further GBP weakness has diminished. To look at it another way, a break of 1.3130 would indicate the Tuesday’s (14 Jan) low of 1.2955 is a short-term bottom. Until then, there is still a slim chance of GBP moving below 1.2955 and revisiting the December’s low of 1.2900.”