The prospects for the continuation of the uptrend in Cable appear mitigated below the 1.4000 yardstick, noted FX Strategists at UOB Group.
Key Quotes
24-hour view: “The rapid advance in GBP to 1.4111 last Friday is overbought and this coupled with waning momentum suggests GBP is unlikely to advance much further. GBP is more likely to trade with a downward bias but any decline is unlikely to threaten the support at 1.4040 (1.4060 is already quiet a strong support level). Resistance is at 1.4100 followed by 1.4115.”
Next 1-3 weeks: “Our latest narrative was from early last week where we highlighted that GBP ‘is still strong and the focus is at the year-to-date high of 1.4235’. Since then, GBP has not been able to make much headway on the upside. We continue to hold the same view for now but GBP has move and stay above 1.4160 within these few days or the prospect for further GBP strength would diminish quickly. Conversely, a breach of the ‘strong support’ level at 1.4000 would indicate that the upside risk has dissipated.”
