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Cable is expected to keep navigating between the 1.2150-1.2350 range in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “After the strong surge in GBP on Tuesday (26 May), we indicated yesterday that GBP ‘may not have enough fuel to move clearly above the overnight high of 1.2363’. However, against our expectation for sideway-trading within a 1.2265/1.2365 range, GBP plunged after touching a high of 1.2354 (low of 1.2201). The subsequent rapid bounce from the low suggests that 1.2201 could be a short-term bottom. For today, GBP is likely to consolidate and trade between 1.2220 and 1.2320.”

Next 1-3 weeks: “The rapid manner by which GBP gave up most of its gains from Tuesday came as a surprise. Our expectation from yesterday (27 May, spot at 1.2315) for GBP to trade with an upward bias towards 1.2400 was proven wrong as GBP dropped below the ‘strong support’ level of 1.2230 (low of 1.2201). The sharp but short-lived swings have resulted in mixed outlook. From here, GBP could continue to trade in a choppy manner, likely within a 1.2150/1.2350 range.”