In opinion of FX Strategists at UOB Group, Cable’s outlook looks positive and could attempt a move to the 1.2535 level in the next weeks.
24-hour view: “Our view for GBP yesterday was that it ‘could move above the 1.2455 high; prospect for a move beyond the next resistance at 1.2490 is not high’. While our expectation for GBP to move higher was correct, we did not anticipate the sudden and sharp rise to 1.2516 and the subsequent swift pullback. Indicators are showing mixed signals and for today, GBP could consolidate and trade between 1.2390 and 1.2500.”
Next 1-3 weeks: “We highlighted last Friday that ‘the odds for a lower GBP have diminished’. After trading in a quiet manner for a couple of days, GBP took out the 1.2400 ‘strong resistance’ and soared to a high of 1.2455 yesterday (27 Apr). The tentative pick-up in momentum suggests GBP could edge higher from here but GBP has to crack 1.2535 before a stronger and more sustained advance can be expected. Overall, the outlook for GBP is viewed as mildly positive as long as it does not move below 1.2320 within these few days.”