Cable risks a probable drop to the 1.3000 level in the next weeks, suggested FX Strategists at UOB Group Quek Ser Leang and Lee Sue Ann.
24-hour view: “Yesterday, we held the view that the ‘bias for GBP is on the downside’. However, GBP traded within a relatively narrow range of 1.3053/1.3108 before closing little changed at 1.3074 (+0.04%). The underlying tone still appears to be a tad soft and we continue to see downside bias. That said, the major support at 1.3000 is unlikely to come into the picture for today (there is another support at 1.3040). Resistance is at 1.3095 followed by 1.3110.”
Next 1-3 weeks: “Our latest narrative from Wednesday (06 Apr, spot at 1.3070) still stands. As highlighted, GBP is likely to trade with a downward bias towards 1.3000. That said, it is left to be seen if GBP could crack this major support. Overall, only a breach of 1.3135 (no change in ‘strong resistance’ level) would indicate that the current downward bias has eased.”