Cable is forecast to extend the range bound theme within the 1.3370-1.3560 area in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “While we held the view yesterday that GBP ‘is unlikely to weaken further’, we expected it to ‘trade sideways’. However, GBP soared to 1.3557 before closing on a firm note at 1.3527 (+0.34%). Despite the advance, upward momentum has not improved by much. For today, GBP could edge above 1.3560 before the risk of a pullback would increase. The next resistance at 1.3600 is unlikely to come under threat. On the downside, a breach of 1.3480 (minor support is at 1.3505) would indicate that the current upward pressure has eased.”

Next 1-3 weeks: “There is no change in our view from yesterday (04 Jan, spot at 1.3480). As highlighted, the current movement is viewed as part of a consolidation phase and GBP is likely to trade between 1.3370 and 1.3560 for now. Looking ahead, if GBP closes above the major resistance at 1.3560, it would indicate that GBP is likely to advance to 1.3600 and above.”