Pound Sterling (GBP) is expected to trade in a range between 1.3220 and 1.3320. In the longer run, the likelihood of GBP breaking clearly below 1.3140 has diminished considerably, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Likelihood of GBP breaking clearly below 1.3140 has diminished
24-HOUR VIEW: “In NY trade last Friday, GBP jumped to a high of 1.3309 before settling at 1.3278, up by 0.56%. Despite the strong advance, upward momentum has not increased significantly. Today, we expect GBP to trade in a range, most likely between 1.3220 and 1.3320.”
1-3 WEEKS VIEW: “Our previous update was from last Thursday (31 Jul, spot at 1.3250), in which we stated that ‘strong downward momentum continues to suggest GBP weakness, and the next level to monitor is May’s low of 1.3140.’ On Friday, GBP dropped to within a few pips of 1.3140 (low of 1.3143) before rebounding strongly to a high of 1.3309. The price action has resulted in a sharp slowdown in downward momentum. The likelihood of GBP breaking clearly below 1.3140 has diminished considerably, but only a breach of 1.3355 (no change in ‘strong resistance’ level) would indicate that the GBP weakness from early last week has stabilised.”
