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Cable is expected to advance further once 1.3481 is cleared, in opinion of FX Strategists at UOB Group.

Key Quotes

24-hour view: “GBP popped to a high of 1.3540 last Friday before dropping back quickly. The rapid retreat amid overbought conditions suggests 1.3540 could be an interim top. For today, GBP is likely to consolidate, expected to be within a 1.3390/1.3490 range.”

Next 1-3 weeks: “We highlighted last Thursday (03 Dec, spot at 1.3365) that the recent positive phase in GBP has ended and expected GBP to trade between 1.3240 and 1.3481. We added, ‘in view of the sharp loss in momentum, GBP has to close above 1.3481 in order to indicate it is ready to advance on a sustained basis’. While GBP rose above 1.3481 (high of 1.3540 on Friday), it fell back sharply and closed at 1.3431. Upward momentum has picked up again but we still prefer to wait for a daily closing above 1.3481 (high in Sep) before expecting a move to 1.3600 and beyond. The prospect for a sustained advance is not high for now but would continue to increase as long as GBP does not move below 1.3320 (‘strong support’ level).”