Cable could see its upside renewed on a breakout of the 1.3710 level in the next weeks, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “While we expected GBP to strengthen yesterday, we were of the view that ‘1.3700 is unlikely to come into the picture’. However, GBP popped to a high of 1.3720, dropped quickly to 1.3623 before snapping back up. The price actions have resulted in a mixed outlook and for today, GBP is likely to trade between 1.3620 and 1.3720.”
Next 1-3 weeks: “There is not much to add to our update from yesterday (20 Jan, spot at 1.3645). As highlighted, GBP ‘has to close above 1.3710 before a sustained advance can be expected’. GBP subsequent rose to 1.3720 before retreating to close at 1.3660 (+0.18%). While momentum is positive, it appears ‘tentative’ for now and we continue to wait for added confirmation of a daily closing above 1.3710 before expecting a move to 1.3760, possibly 1.3800. On the downside, a break of 1.3580 (‘strong support’ level was at 1.3550 yesterday) would indicate that the upside risk has dissipated.”
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