Cable is seen attempting a consolidation move ahead of a potential drop to the. Mid-1.2600s, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “We highlighted yesterday that GBP ‘could drift downwards but any weakness is viewed as part of lower trading range of 1.2650/1.2760’. Our expectation did not materialize as GBP traded in a relatively quiet manner between 1.2692 and 1.2780. Momentum indicators are turning ‘neutral’ and GBP could continue to trade sideways for today, expected to be within a 1.2700/1.2800 range.”
Next 1-3 weeks: “Two days ago (23 Sep, spot at 1.2745), we highlighted that ‘downward momentum has improved considerably and GBP could weaken to further to 1.2650’. GBP subsequently dropped to a low of 1.2676 but it has not been able to make further headways on the downside. Shorter-term momentum is beginning to ease and this could lead to a couple of days of consolidation first. As long as the ‘key resistance’ at 1.2830 is not taken out, another down-leg towards 1.2650 is still a distinct possibility.”
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