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FX Strategists at UOB Group noted Cable is expected to keep navigating within a broad consolidative theme in the short term.

Key Quotes

24-hour view: “Our view for GBP to trade sideways between 1.2300 and 1.2490 last Friday was incorrect as the breach of 1.2300 sent it plunging to a low of 1.2205. Downward pressure remains intact and for today, the risk is for further GBP weakness towards 1.2150. The next support at 1.2100 is likely out of reach. Overall, GBP is expected to stay under downward pressure unless it can move back above 1.2320 (minor resistance is at 1.2260).”

Next 1-3 weeks: “When GBP surged to 1.2200 on 27 Mar, we indicated that the ‘recovery in GBP has scope to extend higher but prospect for a move beyond 1.2550 is not high for now’. GBP subsequently extended its gain to 1.2484, traded sideways for several days before lurching lower last Friday (03 Apr) and came close to taking out our ‘strong support’ level at 1.2205. While the ‘strong support’ is still intact, upward pressure has dissipated with the sharp and rapid decline. The immediate risk from here is tilted to the downside but any weakness is viewed as part of a broad1.1950/1.2420 range (a sustained decline below 1.1950 is not expected).”