GBP/USD still bearish, now targets 1.2775 – UOB

In view of FX Strategists at UOB Group, Cable’s outlook remains bearish and could attempt a visit to the 1.2770 area in the next weeks.

Key Quotes

“While we held the view that the bearish phase that started last Monday (07 Aug, spot at 1.3045) is still intact, the ease of which the strong support at 1.2900 was taken out was unexpected (thanks to the weaker than expected UK inflation data)”.

“The strong decline even managed to edge below the next strong support at 1.2850 (overnight low of 1.2846). Downward momentum has picked up strongly and there is room for the current GBP weakness to extend further to 1.2775 (even though the July’s low near 1.2710/15 may not be easy to break)”.

“On the upside, resistance is at 1.2930 but only a break back above 1.2970 (stop-loss adjusted sharply lower from 1.3060) would indicate that the current bearish phase has ended”.