GBP/USD keeps focused on 1.30 – UOB

Cable should break above the ley 1.30 handle in order to allow for extra gains to probably 1.3150, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our view for GBP to trade in a “lower trading range” was incorrect as it surged and took out the major 1.3000 level (high of 1.3012). The rally appears to be over-extended and while a retest of 1.3010/15 level is not ruled out, the next resistance at 1.3050 is likely out of reach. Support is at 1.2920 followed by 1.2880”.

Next 1-3 weeks: “There is no change to our view from yesterday (21 Oct, spot at 1.2880) wherein “GBP has to ‘punch’ above 1.3000 and register a NY closing above this level in order to indicate that the current rally has enough ‘ammunitions’ to extend to 1.3050, possibly as high as 1.3150”. GBP subsequently rose to 1.3012 but was unable to maintain a toehold above 1.3000 (NY close of 1.2958). That said, further GBP strength is not ruled out and only a break of 1.2770 (‘strong support’ level was at 1.2700 yesterday) would indicate that the positive phase that started more than a week ago has run its course”.