A sustained move up in Cable is likely if 1.3200 is cleared, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “Our expectation for GBP to ‘trade within a 1.2900/1.3080’ range was wrong as it rocketed to a high of 1.3155 (low has been 1.2930). Upward momentum is strong and GBP could advance further even though overbought conditions suggest the major resistance at 1.3200 could be just out of reach (there is a minor resistance at 1.3175). Support is at 1.3080 followed by 1.3040.”
Next 1-3 weeks: “We noted on Wednesday (04 Nov, spot at 1.3030) that the ‘near-term outlook is clouded’ and GBP ‘could trade between the two major levels of 1.2845 and 1.3200’. The sudden and strong liftoff in GBP that sent it a high of 1.3155 yesterday (05 Nov) and the subsequent strong daily closing at 1.3153 (+1.23%) was unexpected. While upward momentum has improved, GBP has to move and stay above the major resistance at 1.3200 before further sustained advance can be expected. At this stage, the prospect for this scenario is not high but it would increase further as long as GBP does not move below 1.3000 (‘strong support’ level) within these few days. Looking ahead, the next resistance above 1.3200 is at 1.3255 followed by 1.3300.”
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