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In view of FX Strategists at UOB Group, the upside momentum in Cable could test the 1.3190 area in the next weeks.

Key Quotes

24-hour view: “Brexit optimism continues to boost GBP as it edged above the strong 1.3100 resistance and touched a high of 1.3111 during NY hours. The strong daily closing (NY close of 1.3102) suggests scope for GBP to advance further but at this stage, a clear break above 1.3155 seems unlikely (next resistance is at 1.3190). All in, GBP is likely to stay underpinned from here unless it drop back below 1.3040 (minor support is at 1.3070)”.

 

Next 1-3 weeks: “We highlighted on Monday (05 Nov, spot at 1.3000), the “rebound in GBP has room to extend higher to 1.3100″. While the expectation was right as GBP touched a high of 1.3111 during NY hours, the pace of the advance has been more rapid than expected. From here, the rebound could extend further but at this stage, a break of the major 1.3190 resistance would come as a surprise. On the downside, only a move back below the ‘key support’ at 1.2950 (level previously at 1.2840) would indicate that a short-term top is in place”.