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Cable keeps recovering ground lost and is now targeting the 1.3020 region, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “While we expected GBP to strengthen yesterday, we held the view that ‘the prospect for a rise beyond 1.2930 is unlikely’. We underestimated GBP strength as it soared to an overnight high of 1.2967. Further advance in GBP appears likely even though a break of last week’s peak near 1.3020 would come as a surprise (minor resistance is at 1.2995). Support is at 1.2920 followed by 1.2880.”

Next 1-3 weeks: “We highlighted yesterday (05 Mar, spot at 1.2870) that ‘odds for GBP to move to 1.2700 have diminished’. We added, ‘a break of 1.2900 would indicate that 1.2726 is an interim bottom’. However, the subsequent strong advance that sent GBP to a high of 1.2967 was not exactly expected. The current movement is viewed as part of a recovery phase and GBP could move above last week’s peak near 1.3020. At this stage, the prospect for further extension to 1.3070 is not high. Overall, GBP is expected to trade on a firm footing from here as long as the ‘strong support’ at 1.2850 is intact.”