GBP/USD now seen side-lined near term – UOB

GBP/USD is now expected to navigate within the 1.3500-1.3645 range in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that the ‘outlook is mixed’ and we expected GBP to ‘trade within a relatively broad range of 1.3560/1.3625’. GBP subsequently rose to 1.3620 before plunging to a low of 1.3437 during late NY session. The swift and sharp drop in GBP has room to extend but any weakness is expected to encounter solid support at 1.3500. Resistance is at 1.3565 but only a breach of 1.3580 would indicate that the current downward pressure has eased.”

Next 1-3 weeks: “Our update from yesterday (23 Feb, spot at 1.3595) still stands. As highlighted, GBP is likely to trade sideways for now, expected to be between 1.3500 and 1.3645. Looking ahead, the downside appears to be more at risk but GBP has to break clearly below the solid support at 1.3500 before a sustained decline is likely (next support is at 1.3455).”