Cable keeps the bearish outlook intact in the near term, according to FX Strategists at UOB Group.
Key Quotes
24-hour view: “While the sharp decline in GBP to an overnight low of 1.3151 appears to be running ahead of itself, there is no sign of stabilization just yet. From here, a dip below the overnight low seems likely but in view of the oversold conditions, the prospect for a sustained move below 1.3125 is not high (1.3100 is another strong support). Resistance is at 1.3215 but stabilization is only upon a move back above 1.3240″.
Next 1-3 weeks: “GBP plummeted below the previous year-to-date low of 1.3205 yesterday and hit 1.3151. The break of the key 1.3205 level suggests that GBP has reentered a bearish phase. However, after the sharp decline last month, indicators have to fully unwound and any weakness from here is likely to be grinding and last November’s low of 1.3040 is likely out of reach this time round (1.3100 is already a strong support). That said, the outlook for GBP is deemed as bearish until the ‘stop-loss’ at 1.3290 is taken out”.
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