GBP/USD still bearish, a test of 1.2900 appears unlikely – UOB

Cable’s stance remains bearish in the near term, although a visit to the 1.2900 handle seems to have lost some momentum for the time being, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “GBP registered an ‘inside day’ yesterday, trading within a relatively tight 1.2970/1.3030 range before ending the day largely unchanged. Indicators are mostly ‘neutral’ which suggest further consolidation from here”.

Next 1-3 weeks: “We turned bearish GBP on Monday (07 Aug, spot at 1.3045) and were of the view that despite the over-extended decline, there is room for further extension to 1.2955. The target was slightly exceeded when GBP hit a low of 1.2953 on Tuesday. While the outlook is still deemed as bearish, the strong bounce off the low has dented the downward momentum and the odds for extension towards the next target at 1.2900 are not high. On the upside, only a move back 1.3100 (stop-loss adjusted lower from 1.3165) would indicate that the current bearish phase has ended. Positioning wise, the entry level suggested at 1.3090 is not met”.