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While further gains in Cable are not ruled out, the 1.2370/1.2610 range is forecasted to prevail in the next weeks.

Key Quotes

24-hour view: “Expectation for GBP to ‘edge lower’ yesterday was wrong as it rebounded strongly by +0.99% (NY close of 1.2471). While overbought, the robust recovery has room to extend towards 1.2525. For today, the next resistance at 1.2565 is unlikely to come under threat. Support is at 1.2445 followed by 1.2420.”

Next 1-3 weeks: “After closing lower for a few days in a row, the sudden snap back in GBP that sent it soaring to an overnight high of 1.2477 came as a surprise (GBP closed at 1.2471, up by +0.99%, the biggest 1-day gain in 3 weeks). The strong rebound indicates that the recent weak phase in GBP ended ‘maturely’. In other words, yesterday’s 1.2337 low was the extent of the decline (we were expecting a move to 1.2320). Downward pressure has dissipated and upward pressure is beginning to build up. From here, GBP could edge higher but any advance is viewed as part of a 1.2370/1.2610 range. To put it another way, a sustained advance above 1.2610 is not expected for now.”