GBP/USD stance now shifted to neutral – UOB

FX Strategists at UOB Group noted that Cable’s outlook has now shifted to neutral from bullish, and a consolidation phase is now likely.

Key Quotes

“The pullback from last week’s 1.4346 high went deeper than expected and took out the ‘stop-loss’ level for our bullish view at 1.4030 yesterday (overnight low of 1.4026). The bullish phase that started about 2 weeks ago has ended and last week’s 1.4346 high is deemed as an interim top”.

“In other words, GBP has moved into a consolidation phase and is expected to trade sideways for now, likely within a relatively broad range of 1.3930/1.4200. Looking further ahead, further GBP strength is not ruled out but 1.4346 is acting as a very strong resistance now and this level is unlikely to be challenged, at least not for the next 1 to 2 weeks”.