In opinion of FX Strategists at UOB Group, Cable risks further downside in the near-term, although within the broader 1.2950/1.3160 range.
24-hour view: “We highlighted yesterday that ‘indicators are showing ‘mixed’ signals and for today, GBP could trade in a choppy manner between 1.3030 and 1.3130’. Our view was not wrong as GBP subsequently traded between 1.3044 and 1.3132. Downward momentum is beginning to improve and, GBP could drift lower to 1.3005. For today, a sustained decline below 1.3005 is not expected (next support is at 1.2950). Resistance is at 1.3080 followed by followed by 1.3110.”
Next 1-3 weeks: “There is not much to add to the update from yesterday (11 Aug, spot at 1.3075). As highlighted, last week’s high of 1.3185 is likely a shortterm top. The current movement is viewed as part of consolidation phase. For the next couple of weeks, GBP is likely to drift lower but any weakness is viewed as part of a 1.2950/1.3160 range. Looking forward, only a clear break below 1.2950 would indicate that GBP is ready for a deeper pull-back.”