Cable lost upside momentum and now moved into a 1.3500-1.3680 consolidative phase, noted FX Strategists at UOB Group.
24-hour view: “Our expectations for GBP to ‘weaken to 1.3545’ did not materialize as it traded between 1.3568 and 1.3636 before closing largely unchanged at 1.3589. The underlying tone still appears to be soft and we continue to see room for GBP to weaken to 1.3545. However, the major support at 1.3500 is not expected to come under threat. On the upside, a break of 1.3635 (minor resistance is at 1.3620) would indicate that the current mild downward pressure has eased.”
Next 1-3 weeks: “There is no change in our view from yesterday (12 Oct, spot at 1.3590). As highlighted, the recent build-up in shorter-term upward momentum has fizzled out. The current movement is viewed as part of a consolidation and GBP is likely to trade within a 1.3500/1.3680 range for now.”