GBP/USD bearish on a close below 1.3050 – UOB

The research team at UOB Group noted the neutral stance on GBP/USD, although a close below 1.3050 should turn the outlook to bearish.

Key Quotes

“GBP moved below the strong 1.3050 support to touch a low of 1.3021 before rebounding. While downward momentum is showing signs of slowing, it is too early to expect a sustained recovery”.

“As highlighted last Friday, only a daily closing below 1.3050 would indicate the start of a sustained down-move in GBP. The low has been 1.3021 but GBP rebounded quickly to end the day higher at 1.3070. While the immediate pressure is on the downside, the current weakness does not appear to have enough momentum to extend much further below 1.2970. That said, the downward pressure is intact unless GBP can move back above and stay above 1.3180”.