In opinion of FX Strategists at UOB Group, Cable’s stance remains negative although a test of 1.3458 seems unlikely near term.
Key Quotes
24-hour view: “GBP traded sideways as expected albeit at a narrower and slightly higher range than anticipated. Indicators are still mostly flat and we continue to expect further sideway trading from here, likely within a 1.3510/1.3610 range”.
Next 1-3 weeks: “We have held the same view since 04 May (spot at 1.3570) that while the outlook for GBP is still deemed as bearish, the odds for further weakness to the year-to-date low of 1.3458 are not high. Since then, GBP traded mostly sideways before dipping to a low of 1.3460 last Thursday (10 May). The subsequent rapid bounce from the low continues to suggest that the prospect for further GBP decline is not high. However, only a break of 1.3630 (‘stop-loss’ unchanged) would indicate that the current bearish phase has ended. Until then, another attempt to 1.3455/60 is not ruled but based on the current lackluster momentum, we continue to have doubts that GBP can break below this level convincingly”.
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