GBP/USD could reach the 1.3170 area in the near term – UOB

FX Strategists at UOB Group stay neutral on Cable and noted it could advance to the 1.3170 region in the next weeks.

Key Quotes

24-hour view: “We held the view that GBP has “enough momentum to test the strong 1.3070 first before it should settle down” and added, “1.3105 is likely out of reach”. GBP subsequently rose to a high of 1.3087 before staging a surprising sharp and rapid pull-back. Upward pressure has waned with the rapid pull-back but it is too soon to expect a significant decline. GBP is more likely to consolidate and trade sideways at these higher levels, expected to be between 1.2960 and 1.3065”.

Next 1-3 weeks: “There is not much to add as GBP touched a ‘fresh’ high of 1.3087 before easing off. As highlighted yesterday (11 Sep, spot at 1.3025), while it is too soon to expect a shift to a bullish phase, the current GBP strength could extend higher and test the strong 1.3170 resistance. For now, we view any up-move as part of a corrective rebound and do not expect a sustained break above 1.3170. On the downside, only a break of 1.2900 would indicate that the prevalent upward pressure has eased”.