In opinion of FX Strategists at UOB Group, Cable is still seen within a side-lined theme with the key hurdle at 1.3115 in the short-term horizon.
24-hour view: “We highlighted yesterday that ‘downward momentum is beginning to improve and, GBP could drift lower to 1.3005’. GBP subsequently dipped to a low of 1.3006 before rebounding quickly. While the recovery lacks momentum, there is room for GBP to edge higher even though the strong resistance at 1.3110 is likely out of reach (minor resistance is at 1.3085). On the downside, the low near 1.3005 is expected to be strong enough to hold for today (minor support is at 1.3025).”
Next 1-3 weeks: “There is not much to add to the update from yesterday (11 Aug, spot at 1.3075). As highlighted, last week’s high of 1.3185 is likely a short-term top. The current movement is viewed as part of consolidation phase. For the next couple of weeks, GBP is likely to drift lower but any weakness is viewed as part of a 1.2950/1.3160 range. Looking forward, only a clear break below 1.2950 would indicate that GBP is ready for a deeper pull-back.”
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