Cable could slip back further and retest the 1.3000 region in the next weeks, suggested FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.
24-hour view: “Yesterday, we highlighted that GBP ‘could drop below 1.3050’. We added, ‘the major support at 1.3000 is likely out of reach’. While GBP subsequently took out 1.3050, it rebounded quickly from 1.3046 and ended the day little changed at 1.3069 (-0.02%). The underlying tone still appears to be a tad soft and the bias is on the downside. That said, 1.3000 is still likely out of reach (there is another support at 1.3040). Resistance is at 1.3095 followed by 1.3110.”
Next 1-3 weeks: “We highlighted yesterday (06 Apr, spot at 1.3070) that GBP could breach 1.3050 but it is left to be seen if GBP could crack the major support at 1.3000. GBP subsequently dropped to 1.3046 and there is no change in our view for now. Overall, only a breach of 1.3135 (no change in ‘strong resistance’ level) would indicate that the current downward bias has eased.”