GBP/USD still neutral, 1.4145 stays on the cards – UOB

FX Strategists at UOB Group remain neutral on Cable, while a test of 1.4145 still appears in the horizon.

Key Quotes

24-hour view: “News of a Brexit deal sent GBP soaring to a high of 1.4088. The rally appears to be running too fast, too soon and further sustained upmove seems unlikely. GBP is more likely to consolidate its gains and trade sideways at these higher levels. Expected range for today; 1.3980/1.4070”.

Next 1-3 weeks: “The abrupt and sharp rally in GBP yesterday was clearly unexpected. News of a deal on Brexit sent GBP soaring to a one-month high of

1.4088. Upward pressure has picked up considerably and the risk remains on the upside. However, despite the strong up-move, we are not convinced that the current price action is the start of a bullish phase. That said, the rally has scope to extend further towards the mid-February high of 1.4145 but a sustained break above this level seems unlikely. Overall, GBP is expected to stay supported as long as the key support at 1.3930 is intact”.