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Cable is seen extending the upside while above the 1.3365 level in the near-term, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Last Friday, we highlighted that ‘upward pressure has more or less dissipated’ and we expected GBP to ‘trade within a 1.3315/1.3390 range’. GBP subsequently dropped to a low of 1.3284 before rebounding quickly (high has 1.3381). The rebound has scope to extend higher but any advance is likely limited to a test of 1.3365. The major resistance at 1.3400 is unlikely to come under threat. Support is at 1.3300 followed by 1.3280.”

Next 1-3 weeks: “We have held a positive view in GBP for more than 2 weeks now. Our latest narrative was from last Thursday (26 Nov, spot at 1.3385) wherein ‘a break of 1.3400 would shift the focus to the year-to-date high at 1.3481’. GBP subsequently touched 1.3399 before dropping to a low of 1.3284 last Friday (27 Nov). While our ‘strong support’ level at 1.3280 is still intact, upward momentum has waned and the odds for further GBP strength have diminished. In order to rejuvenate the flagging momentum, GBP has to move and stay above 1.3365 within these 1 to 2 days or a break of 1.3280 would not be surprising and would indicate that the positive phase in GBP has run its course.”