In opinion of FX Strategists at UOB Group, Cable could now visit the 1.3400 handle in the next weeks.
24-hour view: “Instead of ‘probing’ the 1.3510 support (as expected yesterday), GBP sliced through this level and plummeted to a low of 1.3452. The decline was however short-lived as GBP rebounded strongly from the low. Despite the bounce, the undertone is still weak and a retest of the major 1.3450/60 support zone seems likely. At this stage, a sustained below these support levels is not expected. Resistance is at 1.3540 followed by 1.3570”.
Next 1-3 weeks: “We have held the same view since 04 May (spot at 1.3570) that while the outlook for GBP is still deemed as bearish, the odds for further weakness to the year-to-date low of 1.3458 are not high. After trading sideways for more than a week, GBP finally perked up and managed to dip below this level (overnight low of 1.3452). Downward momentum has picked up again and this could lead to further weakness to 1.3400 within the next week or so. On the upside, the ‘stop-loss’ level is currently at 1.3600, down from 1.3630 previously”.
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.