In opinion of FX Strategists at UOB Group, the probability of further downside in Cable appears to have lost momentum in past sessions.
24-hour view: “GBP traded between 1.2816 and 1.2927 yesterday, narrower and slightly higher than our expected consolidation range of 1.2795/1.2920. The movement in GBP now still appears to be part of a consolidation phase. In other words, GBP could continue to trade sideways, likely between 1.2830 and 1.2930.”
Next 1-3 weeks: “We have expected GBP to weaken since early last week. In our latest narrative from last Friday (11 Sep, spot at 1.2795), we indicated that the ‘outlook for GBP remains weak and the next level to focus on is at 1.2680’. GBP subsequently dropped to 1.2763 but has since has rebounded a fair bit. Downward momentum is waning and from here, a breach of 1.2950 would indicate that GBP may have found an interim bottom at 1.2763. Overall, GBP has to close 1.2795 within these few days or the prospect for further weakness would diminish quickly.”
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