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In light of the recent price action, Cable could now attempt a move to 1.1960, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that GBP ‘is still weak’ but were of the view any weakness ‘may be limited to 1.2160’. The subsequent sharp plunge that sent GBP careening to a low of 1.2000 came as a surprise. The outsized and rapid decline in GBP over the past several days is severely oversold. For today, GBP is likely to take a breather and trade between 1.2020 and 1.2220.”

Next 1-3 weeks: “The decline in GBP has been sizeable (to put it mildly) since we indicated exactly one week ago (11 Mar) that ‘a short-term top is in place’. At that time, GBP was trading at 1.2905, about 800 pips higher from current level of 1.2110. As GBP plunges, we continue to hold a negative view and our latest narrative from yesterday (17 Mar) was ‘the focus is at 1.2060 now’. GBP cracked 1.2060 within 24 hours as it hit a low of 1.2000 during NY hours. Needless to say, the super-sized and lightning-fast drop over the past week is severely oversold. That said, unless GBP can move above 1.2350 (‘strong resistance’ was at a much higher of 1.2580 yesterday), last year’s low near 1.1960 is beckoning to GBP.”