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Cable is seen edging higher and testing the vicinity of 1.2380 in the next weeks, according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted last Friday that GBP “could move above the 1.2273 overnight high but a sustained rise above 1.2305 seems unlikely”. While GBP dipped initially, it held above the support indicated at 1.2195 (low of 1.2195) before surging to a high of 1.2296. The subsequent firm daily closing in NY (1.2280) suggests GBP could edge above 1.2300 but the next resistance at 1.2330 is unlikely to come into the picture. Support is at 1.2230 followed by the still rather solid level of 1.2195″.

Next 1-3 weeks: “There is not much to add to last Friday’s (23 Aug, spot at 1.2245) update. As highlighted, while the current movement in GBP is viewed as a consolidation phase, the rapid rise last week suggest GBP would likely probe the top of the expected 1.2150/1.2380 range first in the coming days/weeks. For now, the prospect for a sustained advance above 1.2380 is not high. That said, the swift bounce from 1.2195 last Friday reinforces our view that the immediate risk is tilted to the upside”.