In opinion of the research team at UOB Group, the pair’s bias remains constructive above the 1.4200 handle.
Key Quotes
“Despite the strong rally yesterday, we are not convinced that the current up-move in GBP is the start of a sustained rally”.
“We have been neutral since last Wednesday and expected this pair to trade in a broad 1.4050/1.4400 range”.
“In the space of one week, GBP has touched a low of 1.4056 before rallying strongly to reach 1.4403 during NY session yesterday. In other words, the recent movement is within our expectation”.
“All that said, we cannot ignore the strong short term upward momentum and we would have to reevaluate our view upon a sustained move above 1.4400 (bearing in mind the month’s high is not that far away at 1.4514). Overall, this pair is expected to remain underpinned in the coming days as long as 1.4200 is not taken out”.
(Market News Provided by FXstreet)