Cable keeps the mixed outlook unchanged and is forecasted to trade within the 1.2845-1.3120 range in the near-term, noted FX Strategists at UOB Group.
Key Quotes
24-hour view: “Yesterday, we held the view that GBP ‘could weaken to 1.2890; prospect for a break of last week’s low at 1.2845 is not high’. While our view was not wrong as GBP dropped to low of 1.2865, the subsequent strong surge from the low was unexpected (overnight high of 1.3065). The rapid rise appears to be running ahead of itself but there is scope for GBP to test the 1.3080 resistance first before a more sustained pull-back can be expected. For today, a move beyond 1.3120 is unlikely. Support is at 1.2970, the stronger level is at 1.2940.”
Next 1-3 weeks: “We indicated yesterday that GBP ‘is under mild downward pressure and could edge lower and probe the support at 1.2820’. GBP subsequently dropped to 1.2865 before surging to an overnight high of 1.3065. The break of our ‘strong resistance’ at 1.3055 indicates that the downward pressure has dissipated. The rapid swings have resulted in a mixed outlook and from here; GBP could trade between 1.2845 and 1.3120 for a period of time.”
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