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The upside momentum in Cable could push the pair to another potential visit of the yearly highs near the 1.3500 level (September 1).

Key Quotes

24-hour view: “Our expectation for GBP to trade within a 1.3300/1.3400 range was wrong as it finally cracked 1.3400 and leapt to a high of 1.3442. While conditions are overbought, there is no sign of weakness just. GBP could strengthen further even though overbought conditions suggest a sustained rise above the year-to-date high of 1.3481 is unlikely (next resistance is at 1.3515). Support is at 1.3390 followed by 1.3365.”

 

Next 1-3 weeks: “We have held a positive view in GBP since mid-November. After GBP failed to break 1.3400 on a few attempts, we indicated yesterday (01 Dec, spot at 1.3325) that ‘in order to rejuvenate the flagging momentum, GBP has to move and stay above 1.3365 within these 1 to 2 days or a break of 1.3280 would not be surprising and would indicate that the positive phase in GBP has run its course’. GBP finally blast past 1.3400 during NY hours and surged to a high of 1.3442. From here, all eyes are on the year-to-date high of 1.3481. This solid resistance is followed closely by 1.3516, the peak back in 2019. All in, further GBP strength is likely as long as it does not move below 1.3330 (‘strong support’ level previously at 1.3280).”