Cable might attempt a consolidative range ahead of potential extra downside in the next weeks, in opinion of FX Strategists at UOB Group.
24-hour view: “We highlighted last Friday that ‘momentum indicators are turning ‘neutral and expected GBP to ‘trade sideways within a 1.2700/1.2800 range’. GBP subsequently traded within a wider range than expected (1.2688/1.2805) before closing little changed at 1.2741 (-0.03%). The price action offers no fresh clues and GBP could continue to trade sideways for today, expected to be within a 1.2700/1.2810.”
Next 1-3 weeks: “Two days ago (23 Sep, spot at 1.2745), we highlighted that ‘downward momentum has improved considerably and GBP could weaken to further to 1.2650’. GBP subsequently dropped to a low of 1.2676 but it has not been able to make further headways on the downside. Shorter-term momentum is beginning to ease and this could lead to a couple of days of consolidation first. As long as the ‘key resistance’ at 1.2830 is not taken out, another down-leg towards 1.2650 is still a distinct possibility.”
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