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In opinion of FX Strategists at UOB Group, further upside is now on the cards for Cable.

Key Quotes

24-hour view: “We expected GBP to ‘edge higher’ yesterday but it lifted off and soared to a high of 1.2490. The sharp and rapid advance is deep in overbought territory. That said, there is room for GBP to continue to strengthen even though a break of 1.2540 would come as a surprise (minor resistance is at 1.2510). Overall, only a break of 1.2405 would indicate that the current upward pressure has eased (minor support is at 1.2440).”

Next 1-3 weeks: “We noted yesterday (01 Jul, spot at 1.2385) that the recent weak phase has ended and expected GBP to ‘trade between 1.2280 and 1.2480’. GBP subsequently rose quickly to a high of 1.2490 before ending the day on a firm note at 1.2476 (+0.60%). While upward momentum has improved, it is unclear for now if GBP can continue to march higher. Overall, GBP is expected to trade with an upside bias but at this stage, the prospect for a sustained advance above 1.2580 is not high. On the downside, a break of 1.2355 would indicate that the current upward pressure has eased.”