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The downside momentum in Cable carries the potential to extend to the 1.2820 region in the near term, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “The strong bounce from the 1.2854 low suggests that GBP has likely found a short-term bottom. Despite the strong recovery, we view the current price action as part of a broad sideway-trading range and not the start of sustained up-move. For today; GBP is expected to trade sideways, likely between 1.2910 and 1.3010″.

Next 1-3 weeks: “The ‘correction’ from the 1.3218 peak two weeks ago went deeper than expected as GBP hit a low of 1.2854. Despite the relatively sharp decline, we continue to view the price action as part of corrective pullback. That said, the weak underlying tone suggests the pullback in GBP could extend to 1.2820. For now, we do not anticipate a sustained move below this level. On the upside, a move above 1.3060 would indicate the current weak phase in GBP has stabilized”.