In opinion of FX Strategists at UOB Group, there is still chances for Cable to advance to the 1.3630 region in the next weeks.

Key Quotes

24-hour view: “Yesterday, we highlighted that GBP ‘is likely to move above 1.3600 but the next major resistance at 1.3630 is unlikely to come into the picture’. While our view was not wrong as GBP rose to 1.3603, we did not anticipate the subsequent sharp drop to 1.3533. The decline was however short-lived as GBP rebounded sharply from the low to close at 1.3579 (-0.14%). The sharp but short-lived swings have resulted in a mixed outlook. For today, GBP is likely to trade between 1.3540 and 1.3600.”

Next 1-3 weeks: “We highlighted yesterday (10 Jan, spot at 1.3590) that ‘upward momentum has built up further and a break of 1.3600 would indicate that GBP could advance to 1.3630, possibly 1.3660’. GBP subsequently edged above 1.3600 (high of 1.3603) before staging a surprisingly sharp pullback to 1.3533. The sharp pullback has dented the upward momentum somewhat but as long 1.3525 (no change in ‘strong support’ level from yesterday) is not breached, there is still chance for GBP to advance to 1.3630.”