Economists at Rabobank maintain the view that Cable is at risk of further dips below 1.20, despite its current resilience.

Back from the brink?

“Almost irrespective of UK fundamentals, the biggest driver of cable in the coming weeks is still likely to be the USD. Despite the market’s current doubts about the ability of the Fed to hike rates in March, we remain of the view that the USD will remain well supported in the weeks ahead.” 

“The break above the 50-Day SMA at 1.2135 is a bullish near-term signal. That said, we see room for the USD to reverse this week’s losses and would look for a move back to GBP/USD 1.19 on a one-month view.”