According to FX Strategists at UOB Group, cable is expected to trade in a consolidative fashion in the next weeks.
Key Quotes
24-hour view: “We expected GBP to ‘trade within a range of 1.3050/1.3150’ yesterday. However, it rose to a high of 1.3181 before pulling back. Upward momentum has improved a tad and GBP could test the 1.3195 resistance from here. For today, a sustained advance above this level is unlikely. The next resistance is at 1.3250. On the downside, a breach of 1.3120 followed by 1.3090.”
Next 1-3 weeks: “Two days ago (29 Mar, spot at 1.3100), we noted that downward momentum has improved slightly but we were of the view that GBP has to close below 1.3050 before a sustained decline is likely. We highlighted that the chance for GBP to close below 1.3050 is not high but it would remain intact as long as GBP does not move above 1.3195. GBP rose to a high of 1.3181 during NY hours and while 1.3195 is not breached, the build-up in momentum has fizzled out. In other words, GBP is not ready to head lower and it is likely to trade between 1.3050 and 1.3250 for now.”
