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Cable is seen grinding lower although always against the backdrop of a broad consolidative pattern, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “The sudden and sharp decline that sent GBP plunging to an overnight low of 1.2439 came as a surprise to us. Despite the rapid bounce from the low, the weakness in GBP is not showing sign of stabilization just yet. From here, barring a move above 1.2575 (minor resistance at 1.2535), GBP could dip below the overnight low towards 1.2405 before the weakness should stabilize.”

Next 1-3 weeks: “After closing higher for six days in a row, the sudden and sharp drop in GBP yesterday came as a surprise. While the 1.2648 high posted on Tuesday (14 Apr) is deemed as a short-term top, it is too early to expect a sustained decline in GBP. From here, GBP could move lower but for now, any weakness is viewed as part of a 1.2300/1.2610 range.”