GBP/USD weakness limited around 1.3275 – UOB

According to FX Strategists at UOB Group, Cable’s downside appears limited around 1.3275 in the near term.

Key Quotes

24-hour view: “We highlighted yesterday that the up-move in GBP “has room to extend further to 1.3390” but added the next resistance at 1.3425 is unlikely to come into the picture. GBP subsequently hit a high of 1.3398 before staging a surprisingly sharp decline that hit an overnight low of 1.3295. The 1.3398 high is deemed as a short-term top and the current weakness appears to have scope to extend below the overnight low. However, indicators are already at rather oversold levels and any down-move is likely limited to a test of 1.3275 (next support is at 1.3250). Resistance is at 1.3335 followed by 1.3375”.

Next 1-3 weeks: “We just shifted from a bearish to a neutral stance yesterday and there is no change to the view. As highlighted, the current movement is viewed as part of a correction phase even though the positive shorter-term momentum outlook could lead to a move higher towards 1.3465. At this stage, a clear break above this level is not expected. On the downside, only a move back below the ‘key support’ at 1.3250 would indicate that the mild upward pressure has eased”.