In the opinion of FX Strategists at UOB Group, Cable is now expected to trade within the 1.21/1.24 range in the short-term horizon.
24-hour view: “Our view for GBP to ‘test 1.2310 first before a more sustained can be expected’ did not work out as GBP retreated after touching 1.2287. While downward momentum is not exactly strong, the pull-back has scope to extend lower. From here, a dip below 1.2200 would not be surprising but the next support at 1.2175 is likely out of reach. On the upside, the 1.2287 high is acting as a solid resistance for today (minor resistance is at 1.2265).”
Next 1-3 weeks: “GBP took out 1.2230 ‘key resistance’ and as highlighted yesterday (19 May, spot at 1.2205), a break of this level would indicate that the weak phase that started earlier last week has run its course. The current movement is viewed as the early stages of a consolidation phase. For the next couple of weeks, GBP is likely to trade sideways within a relatively broad range of 1.2100/1.2400.”
GBP/USD LONG (Buy)
Enter at: 1.2194