Cable remains under pressure and could attempt a move to the 1.2900 level in the short-term, noted FX Strategists at UOB Group.
24-hour view: “GBP traded in-line with our expectations overnight, revisiting the Mon’s session lows near 1.2960 (overnight low 1.2955). However, the subsequent rebound to above 1.30 neutralized a large portion of the downside momentum. From here, it is likely GBP would consolidate first at a lower 1.2915/1.3050 range and a move above 1.3120 would indicate that the current downwards phase has ended.”
Next 1-3 weeks: “Our previous rhetoric was that GBP ‘risks breaking bottom of 1.3000/1.3300 range’. Overnight (13-Jan), GBP took out 1.3000 convincingly and traded to a low of 1.2961 before closing at 1.2987. The subsequent build-up of downside pressures means that GBP is ready to take on Dec’s lows at 1.2900 next. All in, GBP is expected to stay under pressure with resistance at 1.3065 and a strong close above 1.3130 would ‘neutralize’ the current downward pressure.”