FX Strategists at UOB Group noted Cable could re-test 2018 low at 1.2958 in the next weeks.
24-hour view: “We anticipated a lower GBP last Friday but were of the view that “odds for a sustained break below last month’s 1.2958 low are not high”. GBP subsequently dropped to a low of 1.2975 before rebounding quickly. Despite the recovery, the undertone remains weak and from here, a dip below the 1.2958 low would not be surprising but at this stage, we do not expect a break of the next support at 1.2930. Resistance is at 1.3040 but the stronger level is at 1.3070”.
Next 1-3 weeks: “We continue to hold the same view wherein we expect GBP to stay under pressure unless it can reclaim the ‘key resistance’ level of 1.3100 (level unchanged from last Friday). A dip below the year-to-date low of 1.2958 would not be surprising but for now, we are seeing another major support at 1.2880 and at this stage, the prospect for a sustained move below this level is not high (1.2930 is already a relatively strong support)”.