Chances for cable to break below 1.3250 remain on the rise in the near term, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “Our view for ‘the rebound in GBP to extend’ was incorrect as it dropped sharply to 1.3303 before settling on a weak note at 1.3328 (-0.69%). While the rapid decline appears to be running ahead of itself, there is scope for GBP test last week’s low near 1.3275. For today, a sustained decline below this level is unlikely (next support is at 1.3250). Resistance is at 1.3355 followed by 1.3385.”
Next 1-3 weeks: “After GBP plunged to a low of 1.3273, we highlighted last Friday (25 Feb, spot 1.3380) that further GBP weakness is not ruled out. However, we noted that there is a major support at 1.3250. Yesterday (01 Mar), GBP dropped sharply to 1.3303 and downward momentum has improved. The odds of GBP breaking 1.3250 has increased. Only a breach of 1.3460 (‘strong resistance’ level was at 1.3505 yesterday) would indicate that GBP is not ready to weaken further.”