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Cable’s potential advance to the 1.2580 region in the short-term horizon seems to be losing momentum for the time being, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted last Friday “momentum has eased considerably and GBP has likely moved into a consolidation/correction phase”. We added, GBP ‘is likely to trade sideways within a 1.2425/1.2505 range’. GBP subsequently traded within a narrower range than expected (between 1.2440 and 1.2495) before settling at 1.2485 (+0.13%). The current movement is still viewed as part of a consolidation phase. In other words, GBP is expected to continue to trade sideways, likely between 1.2440 and 1.2510.”

Next 1-3 weeks: “We noted yesterday (01 Jul, spot at 1.2385) that the recent weak phase has ended and expected GBP to ‘trade between 1.2280 and 1.2480’. GBP subsequently rose quickly to a high of 1.2490 before ending the day on a firm note at 1.2476 (+0.60%). While upward momentum has improved, it is unclear for now if GBP can continue to march higher. Overall, GBP is expected to trade with an upside bias but at this stage, the prospect for a sustained advance above 1.2580 is not high. On the downside, a break of 1.2355 would indicate that the current upward pressure has eased.”