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Cable is now expected to keep the 1.3580-1.3760 range in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that GBP ‘could move above the resistance at 1.3760’. GBP subsequently rose to 1.3759 before dropping sharply to 1.3659 during NY hours. GBP extended its decline this morning and further weakness towards 1.3615 appears likely (there is a relatively strong support at 1.3635). Resistance is at 1.3700 followed by 1.3730.”

Next 1-3 weeks: “We highlighted yesterday that ‘while upward momentum has improved somewhat, GBP has to close above the major resistance at 1.3800 before a sustained advance can be expected’. We added, ‘the prospect for a break of 1.3800 is not high for now but would remain intact as long as GBP does not move below 1.3630 within these few days’. GBP dropped to a low of 1.3659 during NY hours and while 1.3630 is still intact, the build-up in momentum has fizzled out. From here, the bias is tilted to the downside but any weakness is viewed as part of a 1.3580/1.3760 range for now. Looking ahead, if GBP closes below 1.3580, it would indicate the start of a deeper and more sustained pullback.”