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In opinion of FX Strategists at UOB Group, there are still chances for Cable to advance to the mid-1.2400s or even 1.2500 in the next weeks.

Key Quotes

24-hour view: “GBP dipped briefly to 1.2233 yesterday before rallying rapidly to a high of 1.2385. The advance appears to be running ahead of itself and while GBP could retest the 1.2385 high, the next resistance at 1.2420 is unlikely to come into the picture. Support is at 1.2310 followed by 1.2275. The 1.2233 low is likely ‘safe’ for today”.

Next 1-3 weeks: “GBP rallied above 1.2380 yesterday (high of 1.2385) but eased off to end the day at 1.2344 (+0.45%). We have expected a stronger GBP since last Thursday (05 Sep, spot at 1.2245) and indicated that the “strong rebound in GBP has scope to extend to 1.2310″. After GBP moved above 1.2310, we highlighted last Friday (06 Sep, spot at 1.2325) that if “GBP were to close above 1.2380 in NY, it would suggest the recovery could extend to 1.2450, possibly 1.2500″. While the prospect for the recovery to extend to 1.2450 has increased, we still prefer to wait for a more definitive confirmation of a NY closing above 1.2380. On the downside, only a break of 1.2200 (strong support previously at 1.2170) would indicate that the recovery phase has run its course. Shorter-term, 1.2235 is already a strong support”.