FX Strategists at UOB Group noted Cable’s outlook remains neutral and it has likely moved into a consolidation phase.
Key Quotes
24-hour view: “We held the view yesterday that “the relatively strong advance in GBP over the past few days appears to be running ahead of itself and
further sustained up-move is not expected for now”. However, expectation for another ‘push’ higher to 1.2960 did not pan out as GBP dropped sharply from a high of 1.2918. The rapid decline is running too fast, too soon but there is room for a probe of 1.2775 first before stabilization can be expected (next support is at 1.2740). On the upside, we expect 1.2900 to be strong enough to cap any intraday bounce (minor resistance is at 1.2860)”.
Next 1-3 weeks: “We highlighted yesterday (23 Aug, spot at 1.2915) that we “continue to see chance for the 1.2960 level to be tested”. The subsequent sudden and sharp drop of -0.75% (NY close of 1.2815) was clearly unexpected. While the ‘key support’ at 1.2800 is still intact, the weak daily closing is enough to indicate that the recent upward pressure has eased. From here, there is no change to the neutral outlook but GBP is deemed to have moved back into a consolidation phase and is expected to trade sideways, likely within a relatively broad 1.2700/1.2900 range”.
Share
