The recent strong performance in the British pound could lift Cable to the 1.4300 level and above, in opinion of FX Strategists at UOB Group.
Key Quotes
24-hour view: “We highlighted yesterday that ‘overbought advance in GBP could test 1.4100 first before a pullback can be expected’. We added, GBP ‘is not expected to challenge the next resistance at 1.4150’. GBP subsequently rose to 1.4117 before closing at 1.4112. GBP soared during early Asian hours and has just breached 1.4150. While further advance is not ruled out, the rapid rise appears to be overdone and the next major resistance at 1.4300 is unlikely to come into the picture. Support is at 1.4120 followed by 1.4070.”
Next 1-3 weeks: “We have held a positive view in GBP for more than 2 weeks now. In our latest update from Monday (22 Feb, spot at 1.4030), we indicated that ‘upward momentum remains strong and GBP could advance further to 1.4100’. We added, ‘a clear break of 1.4100 would shift the focus to 1.4150’. We did not anticipate the sudden surge in GBP as it just breached 1.4150 during Asian hours and the focus has shifted to 1.4300 followed by the 2018 high of 1.4377. On the downside, a break of 1.4020 (‘strong support’ level was at 1.3940 yesterday) would indicate that the positive phase in GBP has run its course.”
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