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Cable remains firm and a move to the 1.3070 region is probable in the short-term horizon, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “We noted yesterday that ‘upward momentum has improved a tad and GBP could edge higher and test the resistance at 1.2970’. We added, ‘a sustained rise above this level is not expected (next resistance is at 1.3000)’. The subsequent advance was stronger than expected as GBP came close to taking out 1.3000 (overnight high of 1.2991). Upward momentum has improved further and GBP could continue to advance to 1.3035. For today, the next resistance at 1.3070 is likely out of reach. Support is at 1.2950 followed by 1.2925.”

Next 1-3 weeks: “We noted yesterday (05 Oct, spot at 1.2915) that ‘the underlying tone appears to have firmed but GBP has to close above the major resistance at 1.3000 before a sustained advance can be expected’. While GBP closed at 1.2981, the improvement in momentum indicates that GBP is likely to trade with an upward bias from here. A move to the next resistance at 1.3070 would not be surprising but the next major resistance at 1.3130 is unlikely to come into the picture. Overall, the current positive bias is deemed as intact as long as GBP does not move below 1.2890. On a shorter-term note, 1.2925 is already quite a strong level.”