FX Strategists at UOB Group stick to the neutral stance on Cable, which is likely to return to the consolidative phase.
24-hour view: “We indicated last Friday that “GBP is expected to edge lower towards 1.3895” but were of the view that “the prospect for a clear breach of this level is not high”. GBP dropped to a low of 1.3887 before staging a surprisingly strong and swift rebound. The rapid swing has resulted in a mixed outlook and with most indicators turning flat, GBP is likely to trade sideways from here. Expected range for today; 1.3900/1.3980”.
Next 1-3 weeks: “GBP dipped below the strong 1.3895 support and as highlighted last Friday (16 Mar), a breach of this level would indicate that the mild upward pressure has eased and that GBP has moved into a consolidation phase. In other words, we continue to hold a neutral outlook but we expect GBP to trade sideways from here, likely within a 1.3840/1.4000 range”.