Cable is forecasted to keep the consolidation note between 1.2470 and 1.2700 in the next weeks, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “We expected the rapid bounce to extend higher yesterday but held the view that ‘the major 1.2650 is unlikely to come under threat’. The subsequent advance was more robust than expected as GBP came within one pip of 1.2650 (overnight high of 1.2649). The up-move was however short-lived as GBP dropped back swiftly and sharply from the high. The current movement is viewed as part of a correction phase and from here, there is scope to GBP to edge lower but any weakness is likely limited to a test of 1.2550 (next support is at 1.2510). On the upside, resistance is at 1.2620 followed by the still rather strong level of 1.2650.”
Next 1-3 weeks: “We highlighted on Tuesday (14 Jul, spot at 1.2545) that GBP ‘could edge lower but any weakness is viewed as part of a 1.2430/1.2650 range’. However, GBP rose and tested the top of the range instead (overnight high of 1.2650). Momentum indicators have turned ‘neutral’ and instead of edging lower to 1.2430, GBP is more likely to trade sideways within a broad 1.2470/1.2700 range.”
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