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In opinion of FX Strategists at UOB Group, Cable is now expected to trade within the 1.21/1.24 range in the short-term horizon.

Key Quotes

24-hour view: “Our view for GBP to ‘test 1.2310 first before a more sustained can be expected’ did not work out as GBP retreated after touching 1.2287. While downward momentum is not exactly strong, the pull-back has scope to extend lower. From here, a dip below 1.2200 would not be surprising but the next support at 1.2175 is likely out of reach. On the upside, the 1.2287 high is acting as a solid resistance for today (minor resistance is at 1.2265).”

Next 1-3 weeks: “GBP took out 1.2230 ‘key resistance’ and as highlighted yesterday (19 May, spot at 1.2205), a break of this level would indicate that the weak phase that started earlier last week (see annotations in chart below) has run its course. The current movement is viewed as the early stages of a consolidation phase. For the next couple of weeks, GBP is likely to trade sideways within a relatively broad range of 1.2100/1.2400.”