FX Strategists at UOB Group suggested Cable faces further declines in the near term.
24-hour view: “We highlighted yesterday that “a retest of the major 1.3450/60 support zone seems likely” but added “a sustained move below these levels is not expected”. In line with expectation, GBP dropped to an overnight low of 1.3456 before rebounding quickly. The recovery appears incomplete and further up-move towards 1.3570 would not be surprising. The next resistance at 1.3600 is a major level and is unlikely to yield so easily. Support is at 1.3495 followed by the low near 1.3455. The latter level is expected to be strong enough to hold any intraday dip”.
Next 1-3 weeks: “The overnight rebound was surprisingly robust but only break of 1.3600 would indicate that the bearish phase has ended”.
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