FX Strategists at UOB Group now see Cable extending the sideline theme in the next weeks.
Key Quotes
24-hour view: “GBP traded between 1.2807 and 1.2905 yesterday, wider than our expected sideway-trading range of 1.2820/1.2900. Indicators are showing mixed signals and GBP could continue to trade sideways, albeit likely at a higher range of 1.2825/1.2925″.
Next 1-3 weeks: “We indicated in our last update on 23 Oct (spot at 1.2875) that “GBP could ill afford to dither below 1.3000 or the risk of a short-term top would increase rapidly”. Since then, GBP traded sideways to slightly lower and upward pressure has dissipated. The positive phase that started earlier this month has likely made a short-term top at 1.3012 last week. Looking ahead, further GBP strength is not ruled out even though the 1.3000/10 level is acting as a ‘high-water mark’ and would be a tough level to crack. Meanwhile, GBP is expected to trade sideways, likely within a broad 1.2700/1.3000 range”.
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