Cable is still seen trading within the 1.3600-1.3830 range in the next weeks, noted FX Strategists at UOB Group.
Key Quotes
24-hour view: “While we expected GBP to strengthen yesterday, we were of the view that ‘1.3780 is not expected to come into the picture’. The subsequent advance in GBP exceeded our expectations as it rose to a high of 1.3787. The advance is overbought but there is scope for GBP to test 1.3800. The major resistance at 1.3830 is unlikely to come under threat. On the downside, a breach of 1.3720 (minor support is at 1.3740) would indicate that the current upward pressure has eased.”
Next 1-3 weeks: “Yesterday (22 Jul, spot at 1.3710), we highlighted that the chance for GBP to move below 1.3550 has dissipated and we expected GBP to trade within a relatively broad range of 1.3600/1.3830. While shorter-term upward momentum has improved somewhat, there is no change in our view for now. Looking ahead, a break of 1.3830 is not ruled out but GBP is unlikely able to maintain a foothold above this level.”