FXStreet reports that FX Strategists at UOB Group suggest that cable’s price action in the next weeks is expected to navigate between 1.2370 and 1.2610.
24-hour view: “We highlighted yesterday ‘the robust recovery in GBP has room to extend to 1.2525’. We added, ‘the next resistance at 1.2565 is unlikely to come under threat’. Our view was not wrong as GBP rose to 1.2532 before ending the day on a firm note at 1.2520 (+0.39%). Upward momentum has improved, albeit not by much. From here, GBP could edge above 1.2565 but any advance is unlikely to challenge the solid resistance at 1.2610. Support is at 1.2490 but only a move below 1.2445 would indicate the current upward pressure has eased.”
Next 1-3 weeks: “After closing lower for a few days in a row, the sudden snap back in GBP that sent it soaring to an overnight high of 1.2477 came as a surprise (GBP closed at 1.2471, up by +0.99%, the biggest 1-day gain in 3 weeks). The strong rebound indicates that the recent weak phase in GBP ended ‘prematurely’. In other words, yesterday’s 1.2337 low was the extent of the decline (we were expecting a move to 1.2320). Downward pressure has dissipated and upward pressure is beginning to build up. From here, GBP could edge higher but any advance is viewed as part of a 1.2370/1.2610 range. To put it another way, a sustained advance above 1.2610 is not expected for now.”
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