Cable appears to be losing momentum after a closure below the 1.3735 level, according to UOB Group FX Strategists.
Observation for 24 hours: “‘Downward pressure has lessened and the downside risk has more or less dissipated,’ we said yesterday, and we expected GBP to ‘move sideways within a 1.3760/1.3850 band.’ GBP, on the other hand, fell to 1.3742 before recovering to conclude unchanged at 1.3789. (-0.09 percent ). We predict GBP to move sideways in the 1.3755/1.3835 area, based on momentum indicators that are mainly flat.”
Within the next 1-3 weeks: “‘Downward momentum is beginning to build, but GBP must close below 1.3735 before a persistent loss can be envisaged,’ we said on Wednesday (07 July, spot 1.3800). GBP has been unable to make any progress on the downward since then, trading in a very tranquil manner for the past several days. While there is still a risk that GBP will close below 1.3735, the chances of this happening have decreased. On the upside, a break above 1.3880 (no change in’strong resistance’ level) would signal that the downside risk has passed, and GBP might move sideways for a while.”/n
