Cable’s stance remains constructive and further gains are expected above 1.2685, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “GBP rose and briefly touched 1.2665 last Friday before easing off. While upward momentum has waned, it is too early to expect a major pull-back. From here, GBP is more likely to consolidate and trade between 1.2570 and 1.2685.”
Next 1-3 weeks: “We highlighted on 02 Jul (spot at 1.2475) that GBP ‘is expected to trade with an upside bias but the prospect for a sustained advance above 1.2580 is not high for now’. After GBP rose above 1.2580, we indicated in our previous update on 08 Jul (spot at 1.2545) that GBP “is still likely to trade with an upside bias and could edge up to 1.2630”. GBP rose to a high of 1.2668 last Thursday (09 Jul) and appears to be struggling to maintain its momentum. While the outlook is still deemed as positive, GBP has to close above the major 1.2685 resistance before further sustained gains can be expected. On the downside, a breach of 1.2520 (‘strong support’ level previously at 1.2450) would indicate that the current upward pressure has eased. Looking forward, if GBP closes above 1.2685, the prospect for a move to last month’s peak at 1.2812 would increase considerably.”
Share
