Cable is expected to test the upper end of the range near 1.2380 in the next weeks, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “We highlighted yesterday GBP “could edge above 1.2300 but is unlikely to threaten 1.2330″. However, it only touched 1.2285 before staging a surprisingly rapid pull-back (overnight low of 1.2208). The recent positive momentum indicators have turned neutral and GBP has likely moved into a consolidation phase. In other words, GBP is expected to trade sideways for today, likely between 1.2190 and 1.2260″.
Next 1-3 weeks: “There is not much to add to last Friday’s (23 Aug, spot at 1.2245) update. As highlighted, while the current movement in GBP is viewed as a consolidation phase, the rapid rise last week suggests GBP would likely probe the top of the expected 1.2150/1.2380 range first in the coming days/weeks. For now, the prospect for a sustained advance above 1.2380 is not high. That said, the swift bounce from 1.2195 last Friday reinforces our view that the immediate risk is tilted to the upside”.
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