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FX Strategists at UOB Group remain bearish on Cable, adding that it could slip back to 1.2675 in the next weeks.

Key Quotes

24-hour view: “We expected a ‘retest of the 1.2725 level’ yesterday but GBP rebounded quickly after touching a low of 1.2731. Downward momentum has eased and the risk of a sustained decline for today is low. GBP has likely moved into a consolidation phase and is expected to trade sideways for now, expected to be between 1.2730 and 1.2805″.

Next 1-3 weeks: “The bearish ‘target’ indicated at 1.2775 was exceeded as GBP extended its multi-day decline and hit a low of 1.2723 last Friday (10 Aug). As highlighted, the next support below 1.2775 is at 1.2675 and this revised ‘target’ appears to be within reach sometimes this week. The next support below 1.2675 is another 85 pips lower at 1.2590. All in, while the current decline is in oversold territory, there is no sign of stabilization just yet and further weakness still seems likely. On the upside, the ‘stop-loss’ level is currently at 1.2880 (previously at 1.2940)”.