GBP/USD still aims for a test of 1.2812 – UOB

FX Strategists at UOB Group believe Cable could still advance further and visit the 1.12800 barrier and above in the next weeks.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the rapid swings have resulted in a mixed outlook and for today, GBP is expected trade sideways within a 1.2670/1.2770 range’. GBP subsequently traded between 1.2674 and 1.2759, narrower than our expected range. The underlying tone has firmed somewhat and from here, GBP could grind higher but the June’s peak at 1.2812 is likely out of reach for today (1.2780 is already quite a strong level). Support is at 1.2700 followed by 1.2670.”

Next 1-3 weeks: “We turned positive in GBP yesterday (21 Jul, spot at 1.2670) and held the view that GBP ‘is likely to trade with an upward bias’. We added, ‘a break of 1.2740 could lead to a rapid rise to the June’s peak at 1.2812’. Our expectation was not wrong as GBP soared to an overnight high of 1.2768. Further GBP strength is likely and from here, the focus is at 1.2812 and looking forward, the next resistance is at 1.2860. On the downside, the ‘strong support’ level has moved higher to 1.2630 from yesterday’s level of 1.2560.”