Cable still targets the 1.3890 level as long as it does not break below 1.3760, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “We highlighted last Friday that “the advance in GBP has scope to extend but a break of last week’s high near 1.3890 is unlikely”. Our view was not wrong as GBP subsequently rose to within a couple of pips of 1.3890 (high of 1.3888) before pulling back. Upward pressure has eased and GBP has likely moved into a consolidation phase. In other words, GBP is likely to trade sideways for today, expected to be within a 1.3800/1.3870 range.”
Next 1-3 weeks: “Last Friday (10 Sep, spot at 1.3840), we held the view that there is room for GBP to test 1.3890 but it is too soon to expect a sustained advance. GBP subsequently rose to 1.3888 before pulling back. As long as 1.3760 is not breached, GBP could stage another attempt to move to 1.3890. Looking ahead, GBP has to close above 1.3910 before a sustained rise can be expected.”
