GBP/USD: Diminished bets for a move to 1.2700 – UOB

Cable’s probability of a visit to the 1.2700 level appears to have lost some momentum as of late, according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our view for GBP yesterday was that it “could edge higher towards 1.2860 but 1.2900 is not expected to come into the picture”. The pace of the subsequent advance was faster than expected as GBP rose quickly to an overnight high of 1.2873 (before ending the day right at the high in NY). Upward pressure has improved further and GBP could edge above the strong resistance at 1.2900. For today, the prospect for a rise beyond 1.2930 is not high. The current upward pressure is deemed as intact as long as the support at 1.2820 is not taken out (minor support is at 1.2845).”

Next 1-3 weeks: “After GBP dropped sharply to a low of 1.2726 last Friday, we indicated on Monday (02 Mar, spot at 1.2805) that ‘the downside in GBP is exposed even though 1.2700 is a strong support and may not come into the picture so soon’. Since then, GBP has not been able to make much headway on the downside. Downward momentum has eased and the odds for a move to 1.2700 have diminished. From here, unless GBP can move and stay below 1.2820 within these few days, a break of 1.2900 would indicate that 1.2726 is an interim bottom.”