GBP/USD temporary top in place? – UOB

In light of Cable’s recent price action, FX Strategists at UOB Group hinted at the likelihood that a temporary top could be in place.

Key Quotes

24-hour view: “We expected a higher GBP last Friday but were of the view that the 1.3570 resistance may not be easy to break. GBP/USD touched a high of 1.3550 before dropping sharply to hit a low of 1.3445. A temporary top is likely in place and the current movement is viewed as part of a consolidation phase. In other words, expect range trading for now, likely between 1.3425 and 1.3520”.

Next 1-3 weeks: “GBP touched a high of 1.3550 last Friday and the strong 1.3570 resistance remains unchallenged. As highlighted in recent updates, a clear break of 1.3570 would shift the focus towards the year-to-date high of 1.3660. This scenario would not be surprising even though overbought shorter-term conditions could lead to a few days of consolidation first. Only a move back below 1.3390 (‘stop-loss’ level unchanged) would indicate that a top is in place”.