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Cable keeps the positive outlook and is expected to meet the next hurdle at the 1.3080 zone, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Instead of ‘edging higher’ as we expected yesterday, GBP surged and cracked the major resistance at 1.3000 (high of 1.3013) before ending the day on a firm note at 1.2994 (+0.48%). While further gains are not ruled out, severely overbought conditions suggest GBP is likely to grind upwards and gain could be limited to 1.3035. For today, a break of 1.3080 is unlikely. Support is at 1.2950 followed by 1.2925.”

Next 1-3 weeks: “We first expected GBP to move higher last Tuesday (21 Jul, spot at 1.2670) wherein we indicated that GBP ‘is likely to trade with an upward bias; break of 1.2740 could lead to a rapid rise to the June’s peak at 1.2812’. As GBP advances, we maintain our positive expectation and in our latest narrative from Tuesday (28 Jul, spot at 1.2885), we held the view that ‘all eyes are on the round-number resistance of 1.3000’. GBP cracked 1.3000 yesterday (29 Jul) and in the span of less than 2 weeks, GBP has appreciated by more than 2 percent. While upward momentum remains strong, it is left to be seen if GBP can continue to advance at such a torrid pace and from here, the potential gain is likely to be relatively modest. The next resistance level is at 1.3080. On the downside, a break of the ‘strong support’ at 1.2850 (level previously at 1.2740) would indicate that the rally in GBP is ready for a breather.”