In opinion of FX Strategists at UOB Group, cable is now seen navigating within the 1.3500-1.3645 range in the next weeks.

Key Quotes

24-hour view: “We expected GBP to ‘consolidate and trade between 1.3565 and 1.3630’ yesterday. However, GBP plummeted to 1.3639 before staging a rapid rebound to end the day slightly lower at 1.3587 (-0.12%). The choppy price actions have resulted in a mixed outlook and GBP could trade within a relatively broad range of 1.3560/1.3625 for today.”

Next 1-3 weeks: “Last Thursday (17 Feb, spot at 1.3585), we highlighted that GBP has to close above 1.3645 before a sustained advance is likely. As GBP struggled to move above 1.3645, we highlighted on Monday (21 Feb, spot at 1.3595) that the chance for GBP to move clearly above 1.3645 has diminished. Yesterday (22 Feb), GBP dropped below our ‘strong support’ level of 1.3545 (low of 1.3539). The breach of the ‘strong support’ indicates that GBP is not ready to head higher in a sustained manner. In other words, GBP is likely to trade sideways for now, expected to be between 1.3500 and 1.3645.”