UOB Group’s FX Strategists see Cable attempting a move beyond the 1.3400 mark in the short-term horizon.
24-hour view: “While we expected GBP to strengthen yesterday, we were of the view that ‘1.3360 is likely out of reach’. The subsequent GBP strength exceeded our expectation as it rose to a high of 1.3396. The advance was however short-lived as GBP plunged to an overnight low of 1.3265 before snapping back up. The choppy price actions have resulted in a mixed outlook even though the weakened underlying tone suggests that GBP could edge lower and test the 1.3260 level. The next support at 1.3230 is unlikely to come into the picture. Resistance is at 1.3360 followed by 1.3400.”
Next 1-3 weeks: “We have held a positive view in GBP since last Tuesday (17 Nov, spot at 1.3210). In our latest narrative from yesterday (23 Nov), we indicated that ‘upward momentum has improved and a break of 1.3322 would shift the focus to 1.3360 (followed by 1.3400)’. That said, we did not anticipate the sped-up price actions as GBP blew past 1.3322 and 1.3360 and hit a high of 1.3396. The advance was however short-lived as GBP plummeted from the high (overnight low of 1.3265). Despite the set-back, it is too soon to call for a short-term top. As long as 1.3200 is intact (no change in ‘strong support’ level), there is chance, albeit not a high one, for GBP to push above 1.3400. However, overbought shorter-term conditions could lead to a couple of days of consolidation first. Looking forward, the next resistance level of note above 1.3400 is at the year-to-date high of 1.3481.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.