British Pound: Advance has ended with range trade likely against US Dollar – UOB

United Overseas Bank’s Quek Ser Leang and Lee Sue Ann highlight that GBP/USD gapped lower, dropping to 1.3343 and closing at 1.3346 as the Dollar firmed. Short‑term momentum has cooled, but they still see scope for a dip toward 1.3320, while the broader view has turned neutral, with Sterling expected to trade between 1.3320 and 1.3445 in coming sessions.

Sterling shifts to neutral range view

"24-HOUR VIEW: GBP closed at 1.3402 last Friday, but it gapped lower on the open yesterday. When it was at 1.3375, we indicated that “the rapid increase in momentum suggests GBP could break below 1.3360.” We also indicated that “the next support at 1.3340 is likely out of reach.” We were not wrong, as GBP broke below 1.3360 and dropped to a low of 1.3343. Despite the decline, downward momentum has not increased significantly. However, there is scope for GBP to dip below 1.3340 and test 1.3320. Based on the prevailing momentum, a clear break below 1.3320 appears unlikely. To keep the momentum going, GBP must hold below 1.3390, with minor resistance at 1.3375"

"1-3 WEEKS VIEW: Yesterday (13 Jul, spot at 1.3375), we revised our view from positive to neutral. We highlighted that “the GBP advance from late last month has ended.” We added, “for the time being, we expect GBP to trade in a range between 1.3320 and 1.3445.” While we did not quite expect the subsequent sharp decline to 1.3343, we will continue to hold the same view for now. Looking ahead, should GBP break below 1.3320, it could trigger a deeper pullback."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)