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According to FX Strategists at UOB Group, Cable is expected to prolong the ongoing sideline theme between 1.29 and 1.32.

Key Quotes

24-hour view: “We highlighted yesterday ‘the decline is running ahead of itself’ and added, ‘further sustained weakness in GBP appears unlikely’. While our view was not wrong as GBP subsequently traded sideways, the registered range of 1.2990/1.3028 was much narrower than our expected range of 1.2990/1.3060. The current movement is still viewed as part of a consolidation phase but the slightly firmed underlying tone suggest GBP is likely to trade sideways within a higher range of 1.3000/1.3055.”

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.”