GBP/USD: Likely to trade in a range between 1.3260 and 1.3330 – UOB Group
Pound Sterling (GBP) is likely to trade in a range between 1.3260 and 1.3330 against US Dollar (USD). 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: "We expected GBP to 'trade in a range between 1.3220 and 1.3320' yesterday. The subsequent price movements did not turn out as expected. GBP traded in a range of 1.3255/1.3331, closing largely unchanged at 1.3287 (+0.07%). The price action did not result in any increase in either downward or upward momentum. Today, GBP could continue to trade in a range, most likely between 1.3260 and 1.3330."
1-3 WEEKS VIEW: "We previously indicated 1.3140 as the technical target for our negative outlook. Last Friday, GBP dropped to 1.3143 and then rebounded. Yesterday, Monday (04 Aug, spot at 1.3275), we highlighted the following: '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 (‘strong resistance’ level) would indicate that the GBP weakness from early last week (as annotated in the chart below) has stabilised.' There is no change in our view."