FX Strategists at UOB Group remain negative on Cable, which targets the 1.2770 area in the near term.
Key Quotes
24-hour view: “GBP traded sideways as expected albeit at a narrower range than anticipated. The daily closing is on the positive side and the downside risk appears to be rather limited from here. However, any up-move is expected to encounter strong resistance at 1.2925 ahead of the much stronger level near 1.2950”.
Next 1-3 weeks: “We highlighted yesterday that downward momentum is ‘struggling’ and the quiet overnight trading has resulted in further loss in momentum. The odds for further GBP weakness have diminished further but only a move back above 1.2970 (stop-loss level unchanged) would indicate that the 2-week bearish phase that started on 07 Aug (spot at 1.3045) has ended. Until then, another push lower towards the revised target at 1.2775 is not ruled out just yet”.
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