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Cable’s upside momentum could extend to the 1.2975 level in the near term, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted last Friday that the “bias is for further GBP strength even though the strong 1.2930 level is likely out of reach”. Our expectation was correct as GBP rose to 1.2919 before closing at 1.2903. However, the strong opening this morning has led to further improvement in momentum and GBP could extend its advance to 1.2950. The next resistance at 1.2975 is a strong level and is unlikely to come into the picture for today. On the downside, only a move below 1.2875 would indicate that the current upward pressure has eased (minor support is at 1.2900)”.

Next 1-3 weeks: “While the top of our expected sideway-trading range of 1.2770/1.2930 (first highlighted last Tuesday, 12 Nov when GBP was trading at 1.2855) is intact, the underlying tone in GBP has improved as it closed on a firm note in NY last Friday (1.2903, +0.16%). From here, GBP could edge higher in the coming days and test the strong 1.2975 resistance. At this stage, the prospect for GBP to move to last month’s peak at 1.3012 is not high. On the downside, a move below 1.2850 would indicate the current mild upward pressure has eased”.