GBP/USD has likely moved into a consolidation phase – UOB

FX Strategists at UOB Group remain neutral and looks like Cable has moved into a consolidative phase.

Key Quotes

24-hour view: “We highlighted last Friday that "there is room for a probe of 1.2775 first before stabilization can be expected". However, GBP stabilized sooner than expected it rebounded strongly from a low of 1.2800 and hit a high of 1.2880. Downward pressure has clearly eased and we view the current movement as part of a consolidation phase. In other words, we expect GBP to trade sideways for today, likely between 1.2820 and 1.2900”.

Next 1-3 weeks: “GBP tested the strong 1.2800 support last Friday (exact low of 1.2800) before rebounding. The recovery has improved the underlying tone somewhat but it is too early to expect the start of a bullish phase. In other words, we continue to expect GBP to consolidate and trade sideways from here, albeit likely at a higher range of 1.2760/1.2960 (from 1.2700/1.2900 previously)”.