FX Strategists at UOB Group believe Cable could still advance to the 1.40 level and above in the next weeks.
24-hour view: “We expected GBP to strengthen yesterday but we were of the view that ‘the major resistance at 1.4010 is unlikely to come into the picture’. We added, ‘there is another resistance at 1.3980’. GBP subsequently advanced to 1.3979 before easing off. Upward momentum is beginning to wane but GBP could retest the 1.3980 level first before a more sizeable pullback can be expected. The major resistance at 1.4010 is unlikely to come into the picture. Support is at 1.3925 followed by 1.3900.”
Next 1-3 weeks: “Our view from yesterday (29 Apr, spot at 1.3950) still stands. As highlighted, GBP is expected to trade with an upward bias towards 1.4010. At this stage, the prospect for a sustained rise above this major resistance is not high. On the downside, a break of 1.3850 (‘strong support’ level) would indicate that GBP is not ready to move higher.”