Cable could edge higher to the 1.3800 region in the next weeks, suggested FX Strategists at UOB Group.
24-hour view: “We expected GBP to ‘trade between 1.3620 and 1.3720’ yesterday. However, it rose to 1.3745 before closing on a firm note at 1.3736 (+0.56%). Despite the gains, upward momentum has not improved by all that much. That said, the bias is for GBP to move higher and while a break above 1.3760 would not be surprising, the next resistance at 1.3800 is likely out of reach. On the downside, a break of 1.3685 would indicate that the current upward pressure has eased (minor support is at 1.3705).”
Next 1-3 weeks: “On Wednesday (20 Jan, spot at 1.3645), we highlighted that GBP ‘has to close above 1.3710 before a sustained advance can be expected’. GBP rose to 1.3745 yesterday (21 Jan) before closing at 1.3736. Upward momentum has improved and GBP is likely to strengthen towards 1.3800. On the downside, a break of 1.3630 (‘strong support’ level was at 1.3580 yesterday) would indicate that the upside risk has dissipated.”
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