In opinion of FX Strategists at UOB Group, Cable remains neutral and poised to extend its current consolidative theme in the next weeks.
Key Quotes
24-hour view: “In line with expectation, GBP cracked the 1.3425 resistance yesterday but did not have enough momentum to challenge the next major level at 1.3465 (high of 1.3444). The combination of overbought condition and waning momentum suggests limited upside risk for today. That said, it is too early to expect a sustained pull-back. GBP is more likely to consolidate its gains and trade sideways at these higher levels. Expected range for today; 1.3385/1.3450″.
Next 1-3 weeks: “We shifted from a bearish to neutral stance on Monday (04 Jun, spot at 1.3355) and held the view that GBP has moved into a consolidation/correction phase. As highlighted, the shorter-term momentum is positive and this could lead to a move higher to 1.3465. At this stage, a sustained move above this level seems unlikely (next resistance is at 1.3520). On the downside, only a move back below the ‘key support’ at 1.3295 (level previously at 1.3250) would indicate that the current mild upward pressure has eased”.
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