Further gains in cable are likely on a close above 1.3645, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that ‘risk is on the upside but nascent build-up in momentum suggests GBP is unlikely to threaten the major resistance at 1.3645’. Our view was not wrong as GBP rose to a high of 1.3638 during NY session. For today, the overbought advance has scope to extend above 1.3645 but the next major resistance at 1.3680 is likely out of reach. On the downside, a breach of 1.3570 (minor support is at 1.3600) would indicate that the current upward pressure has eased.”

Next 1-3 weeks: “Our view from yesterday (17 Feb, spot at 1.3585) still stands. As highlighted, upward momentum is building but GBP has to close above 1.3645 before a sustained advance is likely. The chance of GBP closing above 1.3645 has increased and a close above this level will shift the focus to 1.3680 followed by 1.3750. However, a break of 1.3545 (‘strong support’ level was at 1.3520 yesterday) would indicate that GBP is not ready to head higher just yet.”