Cable is still seen navigating between 1.3500 and 1.3680 in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “Yesterday, we highlighted that ‘bias for GBP is on the upside but any advance is unlikely to break the strong resistance at 1.3680’. Our view was not wrong as GBP rose to 1.3674 but we did not anticipate the sharp and rapid drop from the high (low of 1.3584 during late NY hours). The rapid drop has gathered momentum and GBP could weaken to 1.3545. A sustained decline below this level appears unlikely (next support is at 1.3500). Resistance is at 1.3615 followed by 1.3635.”

Next 1-3 weeks: “We highlighted yesterday (11 Oct, spot at 1.3635) that the chance for GBP to break above the top of the expected consolidation range of 1.3460/1.3680 has increased. GBP subsequently rose to within several pips of 1.3680 (high of 1.3674) before staging a surprisingly sharp drop (overnight low of 1.3584). The build-up in shorter-term momentum has fizzled out quickly. In other words, GBP is still trading in a consolidation phase, likely within a 1.3500/1.3680 range (narrowed by 1.3460/1.3680 previously).”