Cable still faces further gains in the short-term horizon, suggested FX Strategists at UOB Group.
24-hour view: “We expected GBP to consolidate and ‘trade between 1.3900 and 1.3990’ yesterday. GBP subsequently traded within a lower and narrower range than expected (1.3886/1.3950). The current movement is still viewed as part of a consolidation even though GBP is likely to trade within a higher range of 1.3900/1.3965 for today.”
Next 1-3 weeks: “Our update from Tuesday (20 Apr, spot at 1.3990) still stands. As highlighted, the sharp and rapid rise in GBP earlier this week appears to be a bit overdone but is not showing any sign of weakening just yet. GBP could advance further even though the next major resistance at 1.4100 may not come into the picture so soon. On the downside, a breach of 1.3850 (no change in in ‘strong support’ level) would indicate that the current GBP strength has come to an end.”