In opinion of FX Strategists at UOB Group, Cable remains poised to extend the move higher in the short-term horizon.

KEY QUOTES

24-hour view: “Our expectation for GBP to ‘edge above 1.3760’ did not materialize as it dropped to 1.3680 before rebounding quickly to an overnight high of 1.3749. The underlying tone still appears to be positive and there is chance for GBP to edge above 1.3760. That said, the next resistance at 1.3800 is not expected to come into the picture. On the downside, the 1.3680 low is acting as a solid support and is unlikely to come under threat (1.3710 is already quite a strong level).”

Next 1-3 weeks: “We highlighted last Friday (05 Feb, spot at 1.3675) that ‘only a daily closing below 1.3580 or above 1.3760 would indicate that GBP is ready for a sustained directional move’. Since then, the shorter-term underlying tone has improved and the bias is on the upside. From here, GBP could edge higher but the pace of any advance is likely to be slow and 1.3800 may not come into the picture so soon. On the downside, a break of 1.3640 (‘strong support’ level) would indicate the current mild upward pressure has eased.”