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The neutral bias around Cable is expected to persist for the time being, according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “Instead of “trading sideways between 1.2285 and 1.2365″, GBP drifted lower to close just above the day’s low of 1.2288 (closed at 1.2291). Downward pressure has picked up, albeit not by much and GBP could continue to edge lower to the next support at 1.2260. For today, the strong 1.2235 level is likely out of reach. On the upside, a move above 1.2340 (minor resistance is at 1.2315) would indicate that the current mild downward pressure has eased”.

Next 1-3 weeks: “GBP traded in a quiet manner and registered an ‘inside day’ for the second straight day. The price action is in line with our view from last Friday (04 Oct, spot at 1.2335) wherein the recent weakness has stabilized and GBP is expected “to trade sideways for now”. The rapid decrease in volatility suggests a 1.2235/1.2420 range could be enough to contain the movement in GBP for the next several days (range narrowed from 1.2235/1.2460 previously)”.