Cable’s upside is seen gathering further traction 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 ‘1.3900 is not expected to come into the picture’. However, GBP popped above 1.3900 during late NY session (high of 1.3913) before settling on a strong note at 1.3908 (+0.60%). Robust upward momentum is likely to lead to further GBP strength towards 1.3950. The major resistance at 1.4000 is not expected to come under threat. On the downside, a break of 1.3855 (minor support is at 1.3875) would indicate that the current upward pressure has eased.”
Next 1-3 weeks: “We noted yesterday (05 Apr, spot at 1.3825) that GBP ‘is in a consolidation phase and is expected to trade between 1.3700 and 1.3900’. We did not anticipate the sudden surge in momentum that sent GBP to 1.3913 and the subsequent strong daily closing at 1.3908 (+0.60%). There is scope for GBP to strengthen further but 1.4000 is solid resistance and the odds for a sustained rise above this level are not high. Overall, GBP is expected to trade with a positive bias as long as it does not move below 1.3820 within these few days.”
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