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In opinion of FX Strategists at UOB Group, Cable could have charted and interim low and is now expected to move into a consolidation range.

Key Quotes

24-hour view: “Our view that GBP “’is still likely in a consolidation’ was wrong as it soared to an overnight high of 1.3008 before easing off. The rapid rise appears to be overdone and further sustained GBP strength appears unlikely. From here, GBP could drift downwards but any weakness is viewed as a lower trading range of 1.2890/1.3010 (a sustained decline below 1.2890 is not expected).”

Next 1-3 weeks: “Two days on 15 Sep (spot at 1.2845), we highlighted the waning downward momentum and held the view that GBP ‘has to close below 1.2795 within these few days or prospect for further weakness would diminish quickly’. GBP easily cracked our ‘strong resistance’ level of 1.2950 yesterday as it soared to a high of 1.3008. The price action suggests that the negative phase that started earlier last week has likely made an interim low at 1.2763. From here, GBP could consolidate between 1.2800 and 1.3100 for a period of time before attempting to move below 1.2763.”