FX Strategists at UOB Group reiterated the bearish stance on Cable in the near term horizon.
Key Quotes
24-hour view: “GBP traded within a relatively narrow 1.3242/1.3307 range yesterday and registered an ‘inside day’. The consolidation phase appears incomplete and further sideway trading is expected, albeit likely at a higher range of 1.3250/1.3325″.
Next 1-3 weeks: “The bearish phase that started earlier this month remains intact as GBP hit a fresh 2018 low of 1.3205 on Tuesday (29 May) before registering an ‘inside day’ yesterday. While the down-move is severely oversold, it is too early to expect a low. Only a break of 1.3360 (‘stop-loss’ level) would indicate that a short-term bottom is in place. Until then, another attempt to crack 1.3200 is not ruled out and a break of this level would shift the focus to 1.3150. That said, 1.3200 is rather strong level and this support would not be easy to break (shorter-term indicators suggest GBP could consolidate for a few days first at these lower levels)”.
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