In the opinion of the currency strategists at UOB Group, the GBP / USD now faces further consolidation within the 1.3730-1.3885 range In the next weeks.
24 hour view: “Our view of GBP / USD ‘moving sideways within a range of 1.3800 / 1.3860’ was incorrect. GBP / USD rose to a high of 1.3913 during the New York session, but the advance was short-lived, as it tumbled back to 1.3804. The strong and rapid decline from the high has room to extend lower, but a clear break of support at 1.3760 is unlikely (minor support is at 1.3780). Resistance is at 1.3830, followed by 1.3860. The high of 1.3913 is not expected to enter the scene. “
Next 1-3 weeks: “We highlighted yesterday (Sep 14, GBP / USD at 1.3835) that ‘as long as 1.3760 does not break, GBP / USD could make another attempt to break above 1.3890’. We add: ‘GBP / USD has to close above 1.3910 before that a sustained advance can be expected ‘and that’ the outlook for GBP / USD to close above 1.3910 is not high. ‘While our overall view for GBP / USD of testing 1.3890 was not bad, we were not expecting the way rapid in which GBP / USD rose to 1.3913 during the New York session and the subsequent sharp decline (GBP / USD closed down -0.23% at 1.3808). The upward pressure has dissipated and the current move is seen as part of a consolidation phase. From here, GBP / USD could trade between 1.3730 and 1.3885 for a period of time. “