Cable’s outlook remains neutral and the probability of a move lower seems to be losing momentum, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “We highlighted yesterday that GBP ‘is likely to consolidate and trade between 1.2280 and 1.2380’. Aside from a brief pop to a high of 1.2415, GBP traded in a relatively quiet manner before ending the day little change at 1.2343 (+0.09%). Momentum indicators are mostly neutral and for today GBP could continue to consolidate, likely between 1.2300 and 1.2410.”
Next 1-3 weeks: “After dropping sharply to a low of 1.2248 on Tuesday (21 Apr), the lack of a follow-through on the downside for GBP came as a surprise. The brief pop higher in GBP yesterday touched 1.2415, just a few pips below of ‘strong resistance’ level of 1.2420. While downward momentum has eased, we are holding on to our view that GBP “could weaken further to the month-to-date low near 1.2165”. That said, the odds for a lower GBP have diminished. From here, GBP has to move and stay below 1.2300 within these 1 to 2 days or a breach of 1.2420 (no change in ‘strong resistance’) would not be surprising.”
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