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Cable is seen moving to the 1.3400 neighbourhood on a daily close of 1.3460 in the next weeks, according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our expectation for GBP to ‘edge lower to 1.3520’ did not materialize as it dropped to 1.3540 before closing at 1.3555. However, GBP dropped below 1.3520 earlier this morning and the improved downward momentum is likely to lead to further weakness to 1.3485. For today, the next support at 1.3460 is likely out of reach. Resistance is at 1.3560 followed by 1.3600.”

Next 1-3 weeks: “We have held the same view since last Tuesday (05 Jan, spot at 1.3565) wherein GBP ‘could trade between 1.3460 and 1.3710 for a period of time’. While GBP has yet to move below the bottom of the range at 1.3460, shorter-term downward momentum has improved and a daily closing below 1.3460 could lead to a move towards 1.3400. On the upside, only a move above 1.3630 would indicate the current downside risk has dissipated.”