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Following the recent price action, Cable could now head towards the critical 1.30 mark in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the rapid improvement in momentum suggests GBP could continue to strengthen towards 1.2860 (next resistance is at 1.2900)’. Our view was not wrong as GBP surged to an overnight high of 1.2904 before ending the day on a strong note at 1.2880 (+0.66%). While upward momentum is still strong, overbought conditions suggest a slower pace of advance and the next major resistance at 1.3000 is out of reach for today (1.2940 is already quite a strong level). Support is at 1.2840 followed by 1.2800.”

Next 1-3 weeks: “While we noted yesterday (27 Jul, spot at 1.2805) ‘the next level focus on is at 1.2860 followed by 1.2900’, we did not quite expect the latter level to come into the picture so quickly as GBP surged to an overnight high of 1.2904. The positive phase in GBP that started one week ago (21 Jul, spot at 1.2670) is still clearly intact. From here, all eyes are on the round-number resistance level of 1.3000. Overall, the current positive phase in GBP is deemed as intact as long 1.2740 (‘strong support’ level was at 1.2700 yesterday) is not taken out. On a shorter-term note, 1.2800 is already quite a solid level.”