Upward momentum has slowed somewhat, but instead of pulling back, Pound Sterling (GBP) is likely to trade in a range of 1.3555/1.3655 against US Dollar (USD). In the longer run, outlook appears mixed; GBP could trade in a range of 1.3420/1.3655 for now, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Outlook appears mixed for GBP
24-HOUR VIEW: “Following Monday’s price movements, we indicated yesterday (Tuesday), that ‘there is a chance for GBP to test 1.3580 before the risk of a pullback increases.’ We also indicated that ‘the major resistance at 1.3655 is not expected to come into view.’ We underestimated the upward momentum, as GBP rose to a high of 1.3648 before easing. Upward momentum has slowed somewhat, but instead of pulling back, GBP is likely to trade sideways at these higher levels, probably in a range of 1.3555/1.3655.”
1-3 WEEKS VIEW: “We revised our view from negative to neutral yesterday (24 Jun, spot at 1.3545), indicating that the recent ‘momentum buildup has faded.’ We also indicated that ‘the outlook appears mixed, and GBP could trade in a range of 1.3420/1.3655 for now.’ Our view remains unchanged, but should GBP break and hold above 1.3655, it would increase the potential for GBP moving above 1.3700.
