GBP/USD expected to keep the sideline theme unchanged – UOB

Cable is seen extending the sideline trading in the next week, in opinion of FX Strategists at UOB Group.

24-hour view: “GBP briefly touched 1.2975 but eased off to close at 1.2939 (+0.28%). Despite the relatively firm daily closing, upward momentum is lackluster and the prospect for GBP to move beyond 1.2975 is not high. From here, GBP is more likely to trade sideways to slightly lower, expected to be within a 1.2895/1.2965 range”.

Next 1-3 weeks: “While the underlying tone in GBP has improved as it closed higher for the fourth straight day yesterday (31 Oct), we continue hold the view that last Monday’s (21 Oct) 1.3012 peak is a short-term top. As highlighted on Tuesday (29 Oct, spot at 1.2855), “Looking ahead, further GBP strength is not ruled out even though the 1.3000/10 level is acting as a ‘high-water mark’ and would be a tough level to crack”. In other words, GBP is expected to trade sideways for now, likely between 1.2800 and 1.3000 (range narrowed from 1.2700/1.3000 previously). Even if GBP were to crack 1.3000 again, there is another formidable resistance at 1.3050”.