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Cable is now expected to move into a consolidative phase between 1.3240-1.3481, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our expectation for GBP to ‘strengthen further’ was wrong as it plummeted to a low of 1.3288 before snapping back up. The rapid swings have resulted in a mixed outlook. For today, further choppy trading would not be surprising but GBP is unlikely to move much out of yesterday’s broad range of 1.3288/1.3441.”

Next 1-3 weeks: “Just when we thought the positive phase in GBP that started in mid-Nov is ready to challenge the yearto-date high at 1.3481, GBP plummeted and cracked our ‘strong support’ level at 1.3330 (low of 1.3288). The positive phase is deemed to have ended and GBP is likely to consolidate for now before making the next push higher at a later stage. In view of the sharp loss in momentum, GBP has to close above 1.3481 in order to indicate it is ready to advance on a sustained basis. Meanwhile, it is likely to trade between 1.3240 and 1.3481.”