The downside momentum in Cable could re-visit the 1.3700 level in the next weeks, suggested FX Strategists at UOB Group.
Key Quotes
24-hoour view: “Our expectations for GBP to ‘test 1.3700’ did not materialize as it traded between 1.3731 and 1.3787 before closing largely unchanged at 1.3752 (+0.01%). The underlying tone still appears to be soft and we continue to see scope for GBP to test the major support at 1.3700 (minor support is at 1.3725). Resistance is at 1.3765 followed by 1.3785.”
Next 1-3 weeks: “There is no change in our view from yesterday (18 Aug, spot at 1.3745). As highlighted, the sharp and swift decline earlier this week has scope to extend to 1.3700, with decent odds for extension to 1.3670. On the upside, a break of 1.3805 (‘strong resistance’ level was at 1.3830 yesterday) would indicate that GBP is not ready to head lower.”