In opinion of FX Strategists at UOB Group, Cable could lose further momentum and test the 1.2200 neighbourhood on a potential break below the 1.2250 area.
Key Quotes
24-hour view: “We expected GBP to “grind lower” yesterday but were of the view “the major 1.2250 level could be just out of reach”. GBP subsequently traded in a relatively choppy manner between 1.2276 and 1.2347. Downward pressure has eased somewhat but it is too early to expect a sustained recovery. GBP is more likely to trade sideways to slightly lower, expected to be within a 1.2265/1.2335 range”.
Next 1-3 weeks: “GBP extended its decline and the 1.2250 level that was first indicated last Thursday (26 Sep, spot at 1.2360) appears to be within reach soon (Friday’s low of 1.2270). While the decline from the 1.2582 peak appears to be running ahead of itself, a clear break of 1.2250 could lead to further GBP weakness to 1.2205. On the upside, only a break 1.2390 (‘strong resistance’ level previously at 1.2420) would indicate that the current downward pressure in GBP has eased”.
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