In opinion of FX Strategists at UOB Group, Cable is seen advancing further on a breakout of the 1.3710 level in the next weeks.
24-hour view: “GBP closed on a firm note at 1.3636 yesterday (+0.35%) before extending its gains this morning. Upward momentum is beginning to improve and there is room for GBP to edge above the strong resistance at 1.3670. In view of the nascent build-up in momentum, the next resistance at 1.3700 is unlikely to come into the picture. Support is at 1.3615 followed by 1.3585.”
Next 1-3 weeks: “We noted on Monday (18 Jan, spot at 1.3585) that ‘risk is beginning to shift to the downside but any weakness is viewed as part of a 1.3500/1.3670 range’ GBP subsequently dropped to 1.3522 before staging a relatively robust rebound. While GBP could move above 1.3670, it has to close above 1.3710 before a sustained advance can be expected. At this stage, the prospect for such a move is not high but it would remain intact as long as GBP does not move below 1.3550 within these few days. Looking ahead, the next resistance above 1.3710 is at 1.3760.”