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Cable is expected to keep trading within the 1.2900-1.3200 range in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “While our expectation for GBP to weaken yesterday was not wrong, instead of ‘drifting lower to 1.3025’, it plummeted to a low of 1.2976. The rapid bounce from the low suggests the decline could be running ahead of itself. In other words, further sustained weakness in GBP appears unlikely. From here, GBP is more likely to trade sideways at these lower levels, expected to be within a 1.2990/1.3060 range.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (28 Jan, spot at 1.3060). As highlighted, the recent choppy price actions have resulted in a mixed outlook. For now, GBP could continue to trade in an erratic manner between 1.2900 and 1.3200. Looking ahead, the bottom of the range appears to be more vulnerable but at this stage, the prospect for a sustained decline below 1.2900 is not high.”