GBP/USD: Likely to test 1.3265 before a recovery can be expected – UOB Group

There is scope for Pound Sterling (GBP) to test 1.3265 before a recovery can be expected. In the longer run, a break below 1.3265 would indicate that the advance in GBP from late last month has come to an end, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Below 1.3265, advance in GBP might come to an end

24-HOUR VIEW: "Yesterday, we expected GBP to 'trade in a range between 1.3290 and 1.3350'. GBP subsequently rose briefly to 1.3355 and then dropped to a low of 1.3289, before closing on a soft note at 1.3297 (-0.19%). Downward momentum has increased, albeit not significantly. Today, there is scope for GBP to test 1.3265 before a recovery can be expected. Based on the current momentum, a clear break below this level is unlikely. On the upside, resistance levels are at 1.3330 and 1.3355."

1-3 WEEKS VIEW: "After holding a positive GBP stance since late last month, we highlighted yesterday (09 Dec, spot at 1.3325) that “upward momentum is starting to slow, and a break below 1.3265 (‘strong support’ level) would indicate that the advance in GBP has come to an end.” There is no change in our view."