Cable’s outlook remains neutral in the near term and should likely navigate between 1.2800 and 1.2975, noted FX Strategists at UOB Group.
“Expectation for GBP to grind higher was wrong as this pair dropped sharply from a high of 1.2975 last Friday. The break of the rather strong 1.2890 support (low of 1.2867) has shifted the immediate pressure to the downside. From here, barring a move back above 1.2945 (minor resistance is at 1.2920), GBP is expected to edge lower towards 1.2840 (next support at 1.2800 is a major level and is unlikely to come into the picture for now)”.
“We indicated last Friday that GBP has to break clearly above 1.3030 to indicate that it has moved into a bullish phase again but apportioned low odds for such a move. However, the quick and sharp drop that took out 1.2890 has put paid to the scenario. While the outlook is still neutral, GBP has likely moved into a consolidation phase even though the immediate bias is for a probe lower towards the bottom of the expected 1.2800/1.2975 sideway trading range”.