In opinion of FX Strategists at UOB Group, the upside pressure in Cable is expected to mitigate on a breach of the 1.2200 mark.
24-hour view: “GBP traded sideways between 1.2349 and 1.2476, a much narrower range than our expected range of 1.2300/1.2490. The price action offers no fresh clues and GBP could continue to trade sideways between the two strong levels of 1.2300 and 1.2490 for now.”
Next 1-3 weeks: “After rising quickly to 1.2484 last Friday (27 Mar), GBP has not been able to make much headway on the upside as it traded in a relatively quiet manner over the last few days. For now, we are holding on to our view that the ‘current recovery has scope to extend higher but prospect for a move above 1.2550 is not high’. To look at it another way, there is chance for GBP to test 1.2550 first before a pull-back can be expected. On the downside, a breach of 1.2200 (‘strong support’ previously at 1.2100) would indicate the current upward pressure has dissipated.”
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