Cable’s outlook has now shifted to neutral, expected to navigate between 1.2820/1.3030 in the near term, according to FX Strategists at UOB Group.
“In line with expectation, GBP extended its decline but the support at 1.2895 was unthreatened. However, the lack of a significant recovery suggests that the immediate pressure is still on the downside and 1.2895 could be tested today. At this stage, a sustained move below this level is not expected (next support is at 1.2850). Resistance is at 1.2955 but only a move above 1.2985 would indicate that the immediate downward pressure has eased”.
“The breach of 1.2925 yesterday indicates that last week’s 1.3030 high is the extent of the recent bullish phase. A short-term peak is in place and GBP has likely moved into a 1.2820/1.3030 consolidation phase. Looking further ahead, GBP has move to break clearly above 1.3030 to indicate that it has moved into a bullish phase again but this scenario is unlikely to happen so soon”.