Cable could move into a consolidative theme between 1.3200 and 1.3500 in the next weeks, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “While we noted yesterday that last Friday’s 1.3540 high ‘could be an interim top’, we did not quite anticipate the sharp sell-off in GBP to a low of 1.3325. The decline was however short-lived as GBP rebounded strongly and quickly from the low. The rapid swings have resulted in a mixed outlook and GBP could continue to trade in a choppy manner for today, likely between 1.3270 and 1.3450.”
Next 1-3 weeks: “We highlighted yesterday (07 Dec, spot at 1.3425) that ‘we still prefer to wait for a daily closing above 1.3481 (high in Sep) before expecting a move to 1.3600 and beyond’. However, GBP sliced through the ‘strong support’ at 1.3320 and plunged to a low of 1.3225 before rebounding strongly. The risk for a sustained advance has more or less dissipated and from here, GBP could trade in a choppy manner within a broad range of 1.3200/1.3500.”
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