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FX Strategists at UOB Group remain neutral on Cable, noting that upside pressure appears mitigated for now.

Key Quotes

24-hour view: “While our expectation for “another push higher” in GBP yesterday was correct, the subsequent sharp and rapid plunge from a high of 1.3363 came as a surprise. The 1.3363 high is deemed as a short-term top and is not expected to come into the picture for now. From here, GBP is expected to consolidate and trade sideways, likely within a relatively broad range of 1.3200/1.3300″.

Next 1-3 weeks: “GBP hit a ‘fresh’ high of 1.3363 yesterday before news of Boris Johnson’s resignation sent it tumbling to a low of 1.3189. The breach of the ‘key support’ at 1.3200 suggests that the recent upward pressure has eased. While there is no change to the neutral outlook, GBP has likely moved into a consolidation phase and is expected to trade sideways for the next several days, likely within a broad 1.3150/1.3350 range. Looking further ahead, the bias appears to be tilted to the upside but the levels just below 1.3400 are acting as a major resistance zone now and it may take a while before GBP is ready to challenge this zone”.