Cable’s upside momentum appears unchanged and sees a probable move to the area past 1.3300 in the next weeks, noted FX Strategists at UOB Group.
Key Quotes
24-hour view: “Yesterday, we held the view that ‘there is scope for GBP to push above 1.3280 but last week’s top at 1.3322 is likely out of reach’. Our view was not wrong as GBP rose to a high of 1.3312 before retreating quickly to end the day slightly higher at 1.3268 (+0.14%). Overbought conditions coupled with waning momentum have increased the risk of a deeper pull-back. From here, barring a move above 1.3300, GBP is likely to move lower towards 1.3215 (next support is at 1.3190).”
Next 1-3 weeks: “On Tuesday (17 Nov, spot at 1.3210), we indicated that ‘upward momentum has improved but not by much’ We added, ‘GBP has to close above 1.3280 in order to indicate that it is ready to move towards last week’s top at 1.3322’. GBP rose to a high of 1.3312 yesterday (18 Nov) before dropping back down to close at 1.3268. Shorter-term momentum has deteriorated and the prospect for a GBP to move clearly above 1.3322 has diminished. In order to revive the current flagging momentum, GBP has to move and stay above 1.3380 within these 1 to 2 days or a break of 1.3160 (no change in ‘strong support’ level) would indicate that GBP is not ready to move above 1.3322.”
Share
