FX Strategists at UOB Group still sees unlikely a breakout of the 1.3190 level in the next weeks.
24-hour view: “We expected GBP to ‘probe’ the bottom of the expected 1.3080/1.3170 consolidation range yesterday but it plummeted to a low of 1.3045 during NY hours. While downward momentum has not improved by all that much, the rapid drop could move below the overnight low of 1.3045. However, 1.3000 is a solid support and this level is expected to hold, at least for today. Resistance is at 1.3100 but only a move back above 1.3130 would indicate that the current mild downward pressure has eased”.
Next 1-3 weeks: “GBP broke its 3-day winning streak and closed lower at 1.3061 in NY (down by -0.51%). We continue to hold the same view as highlighted on Wednesday (07 Nov, spot at 1.3100) wherein it would be surprising if the recent rebound in GBP could break 1.3190. However, only a move below the 1.3000 ‘key support’ (no change in level) would indicate that a short-term top is in place. Until then, there is still a chance, albeit a slim one, that GBP could stage another ‘up-leg’ to towards 1.3190”.
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