Cable is expected to trade side-ways between 1.3670 and 1.3810 in the next weeks, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “We highlighted yesterday that ‘it is too soon to expect a sizeable rebound’ and we expected GBP to ‘consolidate and trade sideways within a 1.3670/1.3740 range’. Our view was incorrect as GBP dipped to 1.3670 before rebounding strongly to 1.3776. The rebound appears to be running ahead of itself further GBP strength appears unlikely. For today, GBP is more likely to trade between 1.3700 and 1.3780.”
Next 1-3 weeks: “Yesterday (12 Apr, spot at 1.3705), we noted that ‘downward momentum has not improved by much but a clear break of 1.3670 is not ruled out’. We added, ‘any further weakness is expected to struggle to move below the next support at 1.3640’. GBP subsequently dropped to 1.3670 before rebounding strongly to 1.3776. While our ‘strong resistance’ level at 1.3780 is still intact, downward momentum has waned and the prospect for a break of 1.3670 has diminished. For now, GBP is more likely to trade between 1.3670 and 1.3810.”
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