According to FX Strategists at UOB Group, the near term outlook on Cable has now shifted to neutral from bearish.
Key Quotes
24-hour view: “We expected a higher GBP last Friday but were of the view that “a sustained gain above 1.3290 would come as a surprise”. GBP rose briefly to touch a high of 1.3315 before easing off quickly to close at 1.3265 in NY. While upward pressure has eased, it is too early to expect a significant pull-back. GBP is more likely to consolidate and trade sideways at these higher levels. Expected range for today; 1.3230/1.3310″.
Next 1-3 weeks: “We highlighted last Friday (22 Jun, spot at 1.3245) that the “bearish phase appears to be close to ending” and the subsequent break of the ‘stop-loss’ at 1.3290 indicates that the outlook for GBP has shifted to neutral. Last week’s 1.3102 low is deemed as a short-term bottom and the current movement is viewed as the early stages of a consolidation phase. The immediate bias is tilted to the upside but at this stage, any up-move is viewed as part of a 1.3175/1.3360 consolidation range and not the start of a sustained directional move”.
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