GBP/USD neutral, could test 1.3900 – UOB

FX Strategists at UOB Group keep the neutral outlook on Cable, expecting a test of 1.3900 in the next weeks.

Key Quotes

24-hour view: “Expectation for GBP to extend its rebound yesterday did not materialize as it eased off after touching a high of 1.3997. The down-move from the high lacks momentum and while a dip below the 1.3920 support would not be surprising, a sustained break below the next support at 1.3900 seems unlikely. Resistance is at 1.3970 but the stronger level is at 1.4000”.

Next 1-3 weeks: “GBP traded in a relatively quiet manner for the past couple of days and downward momentum is showing signs of tiring. That said, we continue to see chance for a test of 1.3900 but the odds for a sustained move below this level are not high. On the upside, only a break of 1.4040 (‘key resistance’ unchanged) would indicate that the current weakness has stabilized”.