According to FX Strategists at UOB Group, there is still room for Cable to advance beyond the key 1.30 mark in the near term.
Key Quotes
24-hour view: “Our view for GBP yesterday was, “risk is tilted to the downside towards 1.2900″ but “the next support at 1.2875 is likely ‘safe’ for today”. GBP subsequently dipped to 1.2888 before recovering to end the day little changed at 1.2923 (-0.02%). The mild downward pressure we detected yesterday appears to have eased. The current movement is viewed as part of a consolidation phase. In other words, GBP is expected to trade sideways for now, likely between 1.2900 and 1.2950″.
Next 1-3 weeks: “Our’ strong support’ level at 1.2875 is still intact as GBP recovered after touching 1.2888 and ended the day little changed in NY at 1.2923 (-0.02%). As highlighted yesterday (20 Nov, spot at 1.2925), only a break of 1.2875 would indicate the current mild upward pressure has eased. Until then, there is still chance for GBP to move towards last month’s peak at 1.3012. That said, after the price action over the past couple of days, the probability for such a scenario has decreased. Looking forward, if GBP were to move below 1.2875, it could trade sideways for a period”.
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