Cable risks a deeper pullback to the 1.3600 region in the next weeks, suggested FX Strategists at UOB Group.
24-hour view: “GBP traded in a relatively quiet manner within a 1.3641/1.3692 range yesterday before closing largely unchanged at 1.3661 (+0.03%). Despite the quiet price actions, the underlying tone appears to have weakened and break of the 1.3640 support appears likely. Barring a surge in downward momentum, the August’s low near 1.3600 is unlikely to come into the picture. Resistance is at 1.3685 followed 1.3715.”
Next 1-3 weeks: “Our latest narrative was from last Wednesday (15 Sep, spot at 1.3810) where GBP is expected to ‘trade between 1.3730 and 1.3885 for a period of time’. GBP cracked 1.3730 and plummeted to 1.3640 on Monday (20 Sep). Downward momentum has improved and GBP is likely to weaken further. However, any weakness is expected to encounter solid support at 1.3600 (near August’s low). The current downward pressure is deemed intact as long as GBP does not move above 1.3745 (‘strong resistance’ level).”