FX Strategists at UOB Group remain neutral on Cable, expected to stays rangebound for the time being.
Key Quotes
24-hour view: “We highlighted yesterday that “there is room for GBP to edge above last week’s 1.2936 top but a break of the next resistance at 1.2960 is not expected”. However, GBP only touched a high of 1.2935 before staging a surprisingly sharp and rapid pull-back. Upward pressure has clearly eased and while the pull-back could extend lower to 1.2830, we do not anticipate a sustained break below this level (next support is at 1.2795). Resistance is at 1.2905 followed by the still very solid level at 1.2935″.
Next 1-3 weeks: “GBP touched a high of 1.2932 yesterday before retreating quickly. The high was just a few pips below last week’s 1.2936 peak. The price action lacks momentum and reinforces our current view wherein we expect GBP to consolidate and trade sideways between 1.2760 and 1.2960. Looking further out, it appears that the current consolidation would be resolved by a break above 1.2960 but this is unlikely to happen so soon”.
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