GBP/USD still faces strong resistance at 1.3050 – UOB

In the opinion of FX Strategists at UOB Group, Cable is likely to trade on a mild downside bias and with resistance in the mid-1.3000s.

Key Quotes

24-hour view: “The sudden increase in volatility came as a surprise as GBP surged to a high of 1.3024 before dropping back down quickly to end the day at 1.2949 (+0.22%). The choppy price actions have resulted in a mixed outlook. For today, GBP could continue to trade in a choppy manner, likely between 1.2900 and 1.3020.”

Next 1-3 weeks: “Last Friday (16 Oct, spot at 1.2905), we held the view that GBP “is likely to trade on a slightly defensive mode with 1.3050 acting as a strong resistance”. GBP rose to a high of 1.3024 yesterday (19 Oct) and while downward pressure has eased, only a break of 1.3050 would indicate that GBP is not ready to test the major support at 1.2845. In other words, there is no change in our view for now. That said, in order to rejuvenate the current flagging momentum, GBP has to move and stay below 1.2900 within these 1 to 2 days or the odds for a test of 1.2845 would diminish quickly.”