Further upside in Cable is not ruled out although it faces solid hurdle at 1.3380 ahead of 1.3420.
Key Quotes
24-hour view: “We highlighted yesterday that ‘while the rapid advance appears to be running ahead of itself, robust upward momentum suggests GBP could strengthen further to 1.3300, with lower odds for extension to 1.3330’. Our view was not wrong as GBP popped to a high of 1.3322 but the subsequent sharp sell-off was unexpected (overnight low of 1.3189). Upward momentum has more or less dissipated and the current movement is viewed as part of a consolidation phase. For today, GBP is likely to trade sideways between 1.3165 and 1.3275.”
Next 1-3 weeks: “We have held the same view since last Friday (06 Nov, spot at 1.3130) wherein ‘upward momentum has improved but GBP has to move and stay above the major resistance at 1.3200 before further sustained advance can be expected’. After GBP retreated from a high of 1.3207, we highlighted yesterday (10 Nov) that ‘another attempt to move clearly above 1.3200 is not ruled out just yet and only a break of 1.3065 would indicate that the current upward pressure has eased’. GBP subsequently soared to an overnight high of 1.3278 before closing on a firm note at 1.3276 (+0.87%). Further GBP strength appears likely even though it is a bit too soon to expect a move to the year-todate high at 1.3481. On a shorter-term note, 1.3380 and 1.3420 are already quite strong resistance levels. All in, the current GBP strength is deemed as intact as long as it does not move below 1.3120 (‘strong support’ level was at 1.3065 yesterday).”
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