Cable is likely to attempt some consolidation in the 1.2400/1.2580 range in the short-term horizon, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “Expectation for GBP to “trade sideways” was incorrect as it dipped to 1.2418, rebounded quickly to 1.2483 before trading between the two levels for rest of the session. Despite the relatively weak NY close (1.2438), downward momentum has not improved by much. That said, GBP could edge lower and test the 1.2400 support (last week’s low near 1.2380 is unlikely to come into the picture). Resistance is at 1.2460 followed by 1.2485″.
Next 1-3 weeks: “GBP slipped to 1.2456 and closed lower for the second straight day (1.2479, -0.21%). While we continue hold the view that GBP is “likely to trade sideways”, the positive underlying tone detected previously has dissipated. In other words, our expectation for GBP to “test the top of the expected sideway range of 1.2430/1.2640 first” is unlikely to materialize. From here, GBP is expected to continue to trade sideways, even though likely at a lower and narrower range of 1.2400/1.2580″.
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