Pound Sterling (GBP) is likely to consolidate between 1.3520 and 1.3585. In the longer run, outlook for GBP remains positive, and it may rise to 1.3620; the chances of it reaching 1.3660 this time around are more limited, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Outlook for GBP remains positive
24-HOUR VIEW: “Last Friday, we noted that GBP ‘has likely entered a 1.3500/1.3585 consolidation phase.’ Although our view of consolidation was not wrong, GBP traded between 1.3529 and 1.3573, a much narrower range than expected. The price movements still appear to be part of a consolidation phase, most likely between 1.3520 and 1.3585.”
1-3 WEEKS VIEW: “In our most recent narrative from last Thursday (14 Aug, spot at 1.3580), we indicated that ‘the outlook for GBP remains positive, and it may rise to 1.3620.’ We also indicated that ‘the chances of it reaching 1.3660 this time around are more limited.’ While GBP has not been able to make further headway on the upside, we will maintain our view as long as 1.3485 (no change in ‘strong support’ level) is not breached. A breach of the ‘strong support’ level would indicate that the positive outlook from more than a week ago has been invalidated.”
