Cable’s upside momentum keeps improving and could accelerate on a break above 1.4050 in the next weeks, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “Our expectation for GBP to ‘consolidate’ yesterday was incorrect as it surged to 1.3970 during NY hours. The strong bounce has scope to test the major resistance at 1.4020. In view of the overbought conditions, GBP may not be able to maintain a foothold above this level (minor resistance is at 1.4000). On the downside, a break of 1.3915 (minor support 1.3940) would indicate that the current upward pressure has eased.”
Next 1-3 weeks: “We have held the same view since last Thursday (11 Mar, spot at 1.3930) wherein GBP ‘has moved into a consolidation phase and is expected to trade between 1.3810 and 1.4020’. GBP tested the bottom of the expected range as it dropped to 1.3809 on Tuesday (16 Mar). The sharp bounce yesterday (17 Mar) indicates that GBP is likely to test the top of the expected range at 1.4020. Upward momentum is beginning to improve but GBP has to close 1.4050 before a sustained advance can be expected. The odds for a sustained advance are not high for now but would remain intact as long as GBP does not move below 1.3880.”
Share
