In opinion of FX Strategists at UOB Group, Cable could be heading towards the 1.3625 level in the next weeks.
Key Quotes
24-hour view: “We expected GBP to weaken further yesterday but we were of the view that ‘the next major support at 1.3625 is unlikely to come into the picture’. We highlighted that ‘there is another support at 1.3650’. Our view was not wrong as GBP dipped to a low of 1.3644. Downward momentum has improved a tad and the bias is still on the downside. That said, a break of the major support at 1.3625 appears unlikely for today. Resistance is at 1.3690 followed by 1.3710.”
Next 1-3 weeks: “Our view from yesterday (01 Nov, spot at 1.3675) still stands. As highlighted, GBP is likely to trade with a downward bias towards the solid support at 1.3625. GBP has to close below the solid support at 1.3625 before further sustained weakness can be expected. On the upside, a breach of the ‘strong resistance’ level at 1.3740 (level was at 1.3760 yesterday) would indicate that GBP is not ready to head lower towards 1.3625. Looking ahead, the next support below 1.3625 is at 1.3560.”