Cable is now seen within the 1.2430-1.2600 range in the next weeks, noted FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “We held the view yesterday that GBP ‘could move above 1.2600 but is unlikely to break the next major resistance at 1.2640’. GBP subsequently rose to 1.2600, plunged to 1.2475 before rebounding sharply. The choppy price actions have resulted in a mixed outlook and GBP is likely to trade within a range of 1.2480/1.2580 for today.”

Next 1-3 weeks: “After GBP rose to 1.2601, we highlighted yesterday (24 May, spot at 1.2575) that while upward momentum has not improved by all that much, GBP could advance towards the major resistance at 1.2640. GBP subsequently tested the 1.2600 level again before plummeting below our ‘strong support’ level at 1.2480 (low of 1.2475). The break of our ‘strong support’ level indicates that the recent upward pressure has eased. Looking ahead, further GBP strength is not ruled out but it has to close above 1.2600 before a sustained advance is likely. In the meanwhile, GBP is likely to consolidate and trade between 1.2430 and 1.2600.”

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