Cable’s prospects of further upside are sustained above 1.3365 in the near-term, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “Yesterday, we held the view that ‘the rebound in GBP has scope to extend higher but any advance is likely limited to a test of 1.3365’. We indicated that ‘the major resistance at 1.3400 is unlikely to come under threat’. GBP subsequently popped to a high of 1.3388 before dropping back down quickly. The choppy price actions have resulted in a mixed outlook and for today, GBP could trade between the two major levels of 1.3300 and 1.3400.”
Next 1-3 weeks: “We have held a positive view in GBP for more than 2 weeks now. Our latest narrative was from last Thursday (26 Nov, spot at 1.3385) wherein ‘a break of 1.3400 would shift the focus to the year-to-date high at 1.3481’. GBP subsequently touched 1.3399 before dropping to a low of 1.3284 last Friday (27 Nov). While our ‘strong support’ level at 1.3280 is still intact, upward momentum has waned and the odds for further GBP strength have diminished. In order to rejuvenate the flagging momentum, GBP has to move and stay above 1.3365 within these 1 to 2 days or a break of 1.3280 would not be surprising and would indicate that the positive phase in GBP has run its course.”
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