The upside in Cable faces a major resistance in the 1.2770 area, according to FX Strategists at UOB Group.
Key Quotes
“While we were of the view that the bias for GBP is tilted to the upside, the sudden acceleration to a high of 1.2696 yesterday was unexpected. The subsequent rapid reversal from the high has dented the upward momentum but the undertone is still positive. That said, any up-move from here is unlikely to have enough momentum to move beyond the 1.2696 high”.
“The sudden break above the recent 1.2300/1.2600 consolidation range resulted in a strong surge to a high of 1.2696 yesterday. While the strong rally has shifted the outlook for GBP to bullish, we see strong resistance at 1.2770 and this level may not be easy to crack. Overall, only a move back below 1.2470 would indicate that our bullish expectation is wrong (1.2500 is already a strong short-term support)”.
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