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Cable’s downside momentum could extend to the 1.3760 zone in the short-term horizon, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted last Friday “improved downward momentum could lead to GBP moving below 1.3860 but the next support at 1.3820 is likely out of reach”. We underestimated the downward momentum as GBP plummeted to 1.3779 before rebounding. The sharp rebound has scope to extend but any advance is likely limited to a test of 1.3900. The next resistance at 1.3930 is unlikely to come into the picture. Support is at 1.3820 followed by 1.3790.”

Next 1-3 weeks: “Last Friday (05 Feb, spot at 1.3890), we highlighted that “shorter-term momentum is beginning to improve but GBP has to close below 1.3820 before a sustained decline can be expected”. GBP subsequently dropped briefly to 1.3779 before rebounding to close at 1.3831. Downward momentum has improved a tad and GBP could edge lower to 1.3760 in the coming days. On the upside, a break of 1.3965 would indicate the current mild downward pressure.”