In opinion of FX Strategists at UOB Group, there is still room for Cable to breach 1.3300 and retest 1.3260 in the next weeks.
24-hour view: “Yesterday, we held the view that GBP ‘has room to dip below the major support at 1.3300’. Our expectations did not materialize as GBP edged lower to 1.3308. While downward momentum is not exactly strong, we still see chance for GBP to dip below 1.3300 before a more sizeable rebound can be expected. That said, the next support at 1.3260 is unlikely to come into the picture. Resistance is at 1.3345 followed by 1.3365.”
Next 1-3 weeks: “There is no change in our view from yesterday (25 Nov, spot at 1.3335). As highlighted, in view of the improved downward momentum, GBP could break the major support at 1.3300. A break of this level would shift the focus to 1.3260. Overall, the downside risk is deemed intact as long as GBP does not move above 1.3390 (‘strong resistance’ level was at 1.3410 yesterday).”
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