The outlook on Cable looks mixed but it could still attempt to test the 1.3160 region in the short-term, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that there “is room for GBP to test the 1.2980 support first before a rebound can be expected”. Our view was not wrong as GBP dipped to 1.2971 before rebounding to touch 1.3049 during London hours (before easing off quickly). The rapid but short-lived swings have resulted in a mixed outlook. From here, GBP could trade in a choppy manner and within a relatively broad range of 1.2970/1.3060.”

Next 1-3 weeks: “After popping to a high of 1.3069 last Thursday (13 Feb), GBP has not been able to make much headway on the upside. The price action was not exactly surprising as we highlighted last Friday (14 Feb, spot at 1.3045) that ‘despite the strong advance, we do not view the current GBP strength as part of an uptrend’. For now, we continue to hold the view that the ‘short-term strength could extend to 1.3160’ but after the price action over the past couple of days, the prospect for further GBP strength has diminished. On the downside, a breach of 1.2950 would indicate that the current mild upward pressure has eased.”