According to FX Strategists at UOB Group, Cable’s price action carries the potential to slip back to the mid-1.2800s in the next weeks.
24-hour view: “GBP traded between 1.2900 and 1.2988 last Friday (within last Thursday’s range) and registered an ‘inside trading day’. The price actions suggest GBP is ‘undecided’ for now. That said, the underlying tone is a tad soft and this could lead to a drift lower but any decline is unlikely to break last week’s low near 1.2880 (minor support is at 1.2900). Resistance is at 1.2960 followed by 1.2990.”
Next 1-3 weeks: “Last Thursday (29 Oct, spot at 1.3025), we held the view that ‘while downward momentum has improved a tad, it is premature to expect a clear break of the solid support at 1.2900’. However, GBP subsequently dropped to a low of 1.2882 before rebounding. Downward momentum has improved further but still appears lackluster for now. From here, GBP is deemed to be under mild downward pressure and could gravitate towards the major support at 1.2845. On the upside, a break of 1.3030 would indicate the current mild downward pressure has eased.”