GBP/USD still neutral, potential for further upside – UOB

FX Strategists at UOB Group stay neutral on Cable while they did not rule out further gains while above 1.3895.

Key Quotes

24-hour view: “Expectation for further GBP strength towards 1.4020 was wrong as it slipped after failing to break above 1.4000 (high has been 1.3996). While upward momentum has eased, it is too early to expect a sustained pullback. GBP is more likely to trade sideways to slightly lower from here, expected to be within a 1.3930/1.4000 range”.

Next 1-3 weeks: “The undertone in GBP improved further as it extended its up-move and touched an overnight high of 1.3994. This level is just below the top of our expected 1.3800/1.4000 consolidation range. An intraday move above 1.4000 would not be surprising but GBP has to close above this level to indicate the start of a sustained rebound. In the meanwhile, the current mild upward pressure would continue to improve as long as 1.3895 is intact”.