GBP/USD risks a move to 1.2900 – UOB

Cable remains under pressure and could attempt a test of the 1.2900 neighbourhood in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our view of GBP holding at 1.3000 was incorrect as it fell to low of 1.2961 in NY session. From here, downside pressures are just starting to build and further declines seem likely. A revisit of overnight lows near 1.2960 seems likely today and may even extend towards 1.2935. Resistance is at 1.3030 and a move above 1.3080 would indicate the current downward phase has ended.”

Next 1-3 weeks: “Our previous rhetoric was that GBP ‘risks breaking bottom of 1.3000/1.3300 range’. Overnight (13-Jan), GBP took out 1.3000 convincingly and traded to a low of 1.2961 before closing at 1.2987. The subsequent build-up of downside pressures means that GBP is ready to take on Dec’s lows at 1.2900 next. All in, GBP is expected to stay under pressure with resistance at 1.3065 and a strong close above 1.3130 would ‘neutralize’ the current downward pressure.”