In opinion of FX Strategists at UOB Group, further weakness in the Sterling looks unlikely for the time being.
24-hour view: “While the sharp rebound from last Friday appears to be running ahead of itself, the firm underlying tone suggests there is room for the recovery to extend further. That said, the major 1.2195 resistance level is unlikely to yield so easily (next resistance is at 1.2220). On the downside, only a move back below 1.2115 would indicate that the current upward pressure has eased (minor support is at 1.2130)”.
Next 1-3 weeks: “The strong rebound in GBP last Friday came as a surprise as it registered the largest 1-day advance in one month (1.2146, +0.53%). While the 1.2195 ‘key resistance’ is still intact, the price action suggests the odds for further GBP weakness have diminished. In order to revive the flagging downward momentum, GBP has to move and stay below 1.2070 within these 1 to 2 days or a break of 1.2195 would suggest last week’s 1.2015 low is the extent of the current ‘negative phase’ (GBP would then likely spend some time trading sideways to slightly higher)”.
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