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According to FX Strategists at UOB Group, the probability of a move higher in Cable appears somewhat mitigated for the time being.

Key Quotes

24-hour view: “We expected GBP to trade sideways within a 1.2900/1.2950 range yesterday. The subsequent price action wherein GBP rose to 1.2970 before plummeting back down to 1.2893 came as a surprise. The rapid swing has resulted in a mixed outlook. From here, GBP could continue to trade in a choppy manner and within a relatively broad range of 1.2875/1.2960″.

Next 1-3 weeks: “Our ‘strong support’ level at 1.2875 is still intact as GBP recovered after touching 1.2888 and ended the day little changed in NY at 1.2923 (-0.02%). As highlighted yesterday (20 Nov, spot at 1.2925), only a break of 1.2875 would indicate the current mild upward pressure has eased. Until then, there is still chance for GBP to move towards last month’s peak at 1.3012. That said, after the price action over the past couple of days, the probability for such a scenario has decreased. Looking forward, if GBP were to move below 1.2875, it could trade sideways for a period”.