Cable is now poised to navigate within the 1.3800-1.4000 home in subsequent weeks, suggested FX Strategists at UOB Group.
24-hour view: “We highlighted yesterday that ‘the swift and sharp drop appears to be running before itself but there’s no sign of stabilization just yet. We added, GBP ‘could test the support at 1.3790 first before stabilization is often expected’. GBP subsequently dropped to 1.3803 before staging a surprisingly sharp and robust rebound (high has been 1.3931). Despite the strong bounce, upward momentum has not improved by the maximum amount. That said, GBP could edge higher but a sustained advance above the resistance at 1.3950 is unlikely. Support is at 1.3880 followed by 1.3845.”
Next 1-3 weeks: “Yesterday (03 May, spot at 1.3820), we held the view that ‘the sudden and sharp drop by GBP has scope to increase to 1.3750’. Our view was proven wrong quickly as GBP rebounded sharply and took out our ‘strong resistance’ level at 1.3910 (high of 1.3931). The sharp and rapid swings have resulted during a mixed outlook and GBP is probably going to trade between 1.3800 and 1.4000 for now.”
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