GBP/USD: Short-term in place below 1.2370 – UOB

Cable’s outlook remains positive, although a breach of 1.2370 should leave recent highs beyond 1.2600 as interim tops, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Yesterday, we held the view that ‘barring a break of 1.2405, GBP could edge higher to 1.2510’. While GBP did not break the 1.2405 level (low of 1.2422), neither did it reach 1.2510 (high of 1.2483). Momentum indicators have turned ‘neutral’ with the quiet price action. For today, GBP could consolidate and trade between 1.2405 and 1.2510.”

Next 1-3 weeks: “We held a slightly positive view on GBP since last Tuesday (28 Apr, spot at 1.2425) and indicated that GBP ‘could edge higher to 1.2535’. We added, ‘GBP has to crack 1.2535 before a stronger and more sustained advance can be expected’. GBP surged past 1.2535 on Thursday (30 Apr) and jumped to a high of 1.2644 before staging a surprisingly sharp and rapid retreat. For now, the overall outlook for GBP still appears to be positive and only a breach of 1.2370 (‘strong support’ level) would indicate that 1.2644 is a short-term top.”