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In view of FX Strategists at UOB Group, Cable’s recovery is unlikely to move further north of the 1.2550 area.

Key Quotes

24-hour view: “Instead of “weaken further”, GBP rebounded strongly to an overnight high of 1.2521. The recent weakness appears to have stabilized and a short-term bottom is likely in place. That said, the current GBP strength is viewed as a ‘corrective recovery’ and it is too early to expect a sustained up-move. From here, GBP could extend its overnight gain but the prospect for a break of the strong 1.2550 resistance is not high. On the downside, 1.2465 is expected to be strong enough to hold any intraday pull-back (minor support is at 1.2485)”.

Next 1-3 weeks: “After yesterday’s rebound, the prospect for further weakness has diminished but only break of 1.2550 would indicate downward pressure has eased”.