In the opinion of the FX strategists of the UOB group, Cable should now trade in the 1.21 / 1.24 range in the short term.
24 hour view: “Our vision of the GBP to” test 1.2310 first before expecting a more sustained result “did not work, with the GBP retreating after hitting 1.2287. Although the downward momentum is not exactly strong, the downturn has the potential to extend lower. From there, a drop below 1.2200 would not be surprising but the next support at 1.2175 is probably out of reach. On the upside, the high of 1.2287 acts as a solid resistance for today (a minor resistance is at 1.2265). “
Next 1-3 weeks: “The GBP subtracted 1.2230” key resistance “and as pointed out yesterday (May 19, spot at 1.2205), a break out of this level would indicate that the weak phase which started earlier in the week last (see annotations in the graph below)) has run its course. The current movement is considered to be the first stages of a consolidation phase. Over the next few weeks, the GBP is likely to trade sideways in a relatively wide range of 1.2100 / 1.2400. “