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The strong upside in Cable faces the next key hurdle at the 1.2700 level, according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “GBP rose to 1.2615 yesterday before easing off. The price action was not surprising as we indicated yesterday that ‘a sustained rise above 1.2650 is unlikely’. The combination of overbought conditions and waning momentum suggest that 1.2615 could be an interim top. For today, GBP is likely to consolidate and trade between 1.2500 and 1.2600.”

Next 1-3 weeks: “We just adopted a positive GBP outlook yesterday (02 Jun, spot at 1.2500) and expected GBP to ‘move higher towards 1.2600’. There is no change to our view and once above 1.2600, the April’s peak near 1.2648 could come into the picture quickly (next resistance is at 1.2700). After the strong advance yesterday, the ‘strong support’ level has moved higher to 1.2460 from yesterday’s level of 1.2360.”