FX Strategists at UOB Group noted Cable could attempt some consolidation and even a move lower in the next weeks.
Key Quotes
24-hour view: “Expectation for GBP to ‘test last week’s low near 1.3055’ did not materialize as it traded between 1.3081 and 1.3169. The underlying tone still appears to be on the soft side and GBP could drift lower from here. That said, a clear break of 1.3055 appears unlikely. Resistance is at 1.3140 but only a move above 1.3160 would indicate the current mild downward pressure has eased.”
Next 1-3 weeks: “We highlighted yesterday (07 Jan, spot at 1.3170) that GBP ‘has to register a NY closing above 1.3190 or risk of further weakness remains intact’. GBP touched 1.3210 but retreated quickly and ended the day at 1.3120 (-0.34%). The price action suggests the bottom of the expected 1.3000/1.3300 remains vulnerable (expected range is narrowed from 1.3000/1.3400). All in, GBP is expected to stay under pressure and only a NY closing above 1.3190 would ‘neutralize’ the current downward pressure.”
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