Forex Flash: What lies ahead of GBP/USD? – UBS, Commerzbank and BTMU

FXstreet.com (Barcelona) - The sterling has rapidly left behind the key resistances of 1.500 on Thursday and 1.5100 on Friday, after BoE’s M.King now twisted his former comments about his preference for a weak pound.

Despite the recent advance in the cross, UBS’s Strategists G.Yu and G.Berry keep the bearish outlook on the cross, arguing, “Yesterday’s sharp advance does not change the broader bearish picture. Important resistance is at 1.5199. Support is at 1.4912 ahead of 1.4832”.

In addition, Karen Jones, Head of FICC Technical Analysis at Commerzbank, suggests “The market has eroded its accelerated downtrend and the Elliott wave count is suggesting a rally to 1.5225 possibly 1.5350 ahead of failure”. The expert also believes that this is a temporary correction, seen the cross to slip back towards 1.4259 in the longer term.

“There is potential for the pound to at least stabilise over the coming months versus the dollar before weakening again later in the year as the US fundamentals improve after a temporary softening and speculation of BOE remit changes intensifies once again”, assesses Derek Halpenny, Analyst at BTMU.