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FX Strategists at UOB Group suggested the bearish phase in Cable could be ending.

Key Quotes

24-hour view: “The sharp drop to a low of 1.3102 and the subsequent surge higher that hit an overnight high of 1.3270 was clearly not expected. While the strong recovery appears to be running ahead of itself, there is no sign of weakness just yet and GBP has room to move above 1.3270. That said, 1.3290 is another strong resistance and at this stage, a sustained gain above this level would come as a surprise. On the downside, only a move back below 1.3175 would indicate that the current upward pressure has eased (minor support is at 1.3210)”.

Next 1-3 weeks: “We highlighted on Wednesday (20 Jun, spot at 1.3175) that while the outlook for GBP is bearish, the major 1.3040 level is “likely out of reach” and added “1.3100 is already a strong support”. GBP briefly touched 1.3102 yesterday before rocketing to hit an overnight high of 1.3270. The high was not far from the 1.3290 ‘stop-loss’ level for our bearish view and based on the price action yesterday, a break of 1.3290 would not be surprising at all. In other words, the current bearish phase appears to be close to ending. Looking ahead, a break of 1.3290 would not suggest a bullish reversal but the start of a neutral consolidation phase”.