Cable’s outlook looks positive with the next target emerging at the 1.4235 level in the next weeks, suggested FX Strategists at UOB Group.
24-hor view: “We highlighted yesterday that “the rally is overstretched” and we were of the view that “any further GBP strength is likely limited to a test 1.4175”. As expected, GBP strengthen but it did not get to test 1.4175 (high of 1.4167). Upward momentum has eased and this coupled with overbought conditions suggest that GBP is unlikely to strengthen much further for today. GBP is more likely to consolidate and trade between 1.4100 and 1.4175.”
Next 1-3 weeks: “There is not much to add to our update from yesterday (11 May, spot at 1.4125). As highlighted, GBP is still strong and the focus is at the year-to-date high of 1.4235. That said, overbought shorter-term conditions could lead to a few days of consolidation first. The positive outlook is deemed intact as long as GBP does not move below 1.4020 (no change in ‘strong support’ level).”
