Cable could see its upside reinvigorated on a surpass of 1.3930 in the near-term, noted FX Strategists at UOB Group.
24-hour view: “Yesterday, we highlighted that ‘despite the decline, downward momentum has not improved by much’. However, we were of the view that ‘there is room for GBP to edge lower to 1.3760’. Our expectations did not materialize as GBP rebounded from 1.3803 to an overnight high of 1.3925. From here, GBP could retest the 1.3925/30 level. A breach of this strong resistance is not ruled out but 1.3970 is not expected to come into the picture. Support is at 1.3845 followed by 1.3810.”
Next 1-3 weeks: “We have held a negative view in GBP since late last week. Yesterday (09 Mar, spot at 1.3815), we indicated that ‘while momentum still appears to be lackluster, a break of 1.3760 is not ruled out’. GBP subsequently dropped to 1.3803 before rebounding strongly to a high of 1.3925. Downward momentum has waned and a break of 1.3930 (no change in ‘strong resistance’ level) would indicate that the current mild downward pressure in GBP has dissipated.”