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In opinion of FX Strategists at UOB Group, Cable should meet the next key hurdle at the 1.30 neighbourhood.

Key Quotes

24-hour view: “We highlighted yesterday that GBP “could move above 1.2800 but odds for a sustained rise beyond 1.2850 are not high”. However, GBP surged to a high of 1.2877 before retreating quickly. While the current rally is overbought, it is too early to expect a sustained pullback. There is still room for further GBP strength but the pace of any advance is likely to be slower. From here, barring a move below 1.2740 (minor support at 1.2780), GBP could edge higher but a sustained break of 1.2920 appears unlikely”.

Next 1-3 weeks: “GBP continues with its stupendous rally as the 1.2850 level indicated just yesterday (16 Oct, spot at 1.2765) was quickly exceeded (overnight high 1.2877). As the next resistance of note is some distance away at 1.3000, the current impulsive momentum could continue to carry GBP higher in the coming days. Support is at 1.2740 but only a break of 1.2630 (‘strong support’ was at 1.2530 yesterday) would indicate the current rally in GBP has run its course”.