In opinion of FX Strategists at UOB Group, Cable remains poised for further retracements in the short-term horizon.
24-hour view: “We highlighted last Friday that GBP ‘could decline further but last month’s low near 1.3575 is likely out of reach’. We added, ‘there is another support at 1.3600’. GBP subsequently dipped to 1.3602 before rebounding. Downward pressure appears to have eased and GBP is unlikely to weaken much further. For today, GBP is more likely to trade between 1.3600 and 1.3670.”
Next 1-3 weeks: “Our view from last Friday (20 Aug, spot at 1.3635) still stands. As highlighted, while shorter-term conditions are oversold, solid downward momentum suggests there is room for GBP to decline further. The next major support is at July’s low near 1.3575. The negative outlook for GBP is deemed intact as long as it does not move above 1.3710 (‘strong resistance’ level was at 1.3745 last Friday).”