According to FX Strategists at UOB Group, Cable needs to close above the 1.40 mark in order to spark a more convincing up move.
Key Quotes
24-hour view: “GBP traded between 1.3922 and 1.3989 yesterday, relatively close to our expected 1.3930/1.4000 consolidation range. However, the weak daily closing suggests increasing downward pressure. From here, barring a move back above 1.3990 (minor resistance is at 1.3960), GBP is expected to edge lower towards the strong support at 1.3895. At this stage, the prospect for a clear breach of this level is not high. The next support below 1.3895 is at 1.3845”.
Next 1-3 weeks: “There is not much to add as GBP traded within relatively narrow ranges for the past couple of days. As highlighted in recent updates, while the undertone is positive, GBP has to close above 1.4000 to indicate the start of a sustained up move. Overall, only a break back below 1.3895 would indicate that the mild upward pressure has eased. Looking ahead, a move below 1.3895 would not change the neutral outlook but would indicate that GBP has moved into a consolidation phase”.
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