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Cable should continue to trade within the broad 1.29-1.32 range for the time being, according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that the ‘rebound in GBP has scope to extend higher within an overall 1.2995/1.3080 range’. GBP subsequently rose to 1.3069 before staging a surprisingly sharp drop to an overnight low of 1.2957. The rapid swings have resulted in a mixed outlook and from here, GBP could trade in a choppy manner within a broad range of 1.2940/1.3060.”

Next 1-3 weeks: “GBP reversed an initial bounce to 1.3070 yesterday and dropped quickly back to a low of 1.2957. The choppy price action reinforces our view from Tuesday (04 Feb, spot at 1.3000) wherein the outlook for GBP is mixed and it ‘could trade in an erratic manner between the two major levels of 1.2900 and 1.3200’. Looking forward, prospect for a breach of 1.2900 appears to be higher and as this level is a mid-term support, a break of this level could lead to a deep pullback in GBP.”