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In opinion of FX Strategists at UOB Group, Cable’s prospect remains mixed and is now forecasted to trade between 1.2750 and 1.3000 in the short-term.

Key Quotes

24-hour view: “We highlighted yesterday that GBP ‘is likely to stay under pressure unless it can move above 1.2940’. While we expected GBP to weaken, we held the view that ‘the next support at 1.2825 is unlikely to come into the picture’. Our view was not wrong as GBP dropped to a low of 1.2845 before rebounding quickly (high has been 1.2929). After the rapid bounce, momentum indicators are beginning to turn neutral and further GBP weakness is unlikely. For today, GBP is more likely to consolidate and trade between 1.2875 and 1.2955.”

Next 1-3 weeks: “We have expected GBP to ‘trade between 1.2750 and 1.3000’ since last week. Yesterday (06 Oct, spot at 1.2990), we shifted to a slightly positive view and expected GBP to “trade with an upward bias towards 1.3070”. Our view was proven wrong quickly as GBP plunged and easily cracked our ‘strong support’ level at 1.2890 (low of 1.2864). The rapid swings have resulted in a mixed outlook and from here; GBP could trade between 1.2750 and 1.3000 for a period of time.”