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Cable’s stance remains positive and is expected to edge higher in the short-term horizon, in opinion of FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected GBP to strengthen yesterday but held the view that ‘a break of 1.2540 would come as a surprise’. Our view was not wrong as GBP topped out at 1.2530 even though we did not quite anticipate the swift and sharp drop from the high (low of 1.2458 during NY hours). Upward momentum has eased considerably and GBP has likely moved into a consolidation/correction phase. In other words, GBP is likely to trade sideways to slightly lower for today, expected to be within a 1.2425/1.2505 range.”

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.”