Cable’s upside momentum is seen surpassing the 1.2700 mark in the next weeks, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “We highlighted yesterday GBP ‘could advance above 1.2550’ but added, ‘a move beyond 1.2600 would come as a surprise’. The subsequent strength in GBP surprised us as it surged to an overnight high of 1.2648. While overbought, the current rally appears to have room for another up leg towards 1.2670. The next resistance at 1.2725 is likely out of reach. On the downside a break of 1.2560 would indicate the rally in GBP is ready to take a breather (minor support is at 1.2590).”
Next 1-3 weeks: “While we indicated on Monday (13 Apr, spot at 1.2460) that GBP could strengthen towards 1.2550, the ease by which GBP cracked this level and the next resistance at 1.2600 came as a surprise. The rapid build-up in momentum indicates that the previously “mild upward pressure” is not mild anymore and from here, GBP could extend its advance to 1.2725 (next resistance is at 1.2800). Overall, GBP is expected to trade on a firm footing unless it moves below 1.2500 (‘strong support’ level has moved markedly higher from yesterday’s level of 1.2390).”
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