Tentative buildup in downward momentum could lead to Pound Sterling (GBP) edging lower; the major support at 1.2310 is unlikely to come into view. In the longer run, for the time being, GBP is likely to trade in a 1.2310/1.2550 range, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
GBP is likely to trade in a 1.2310/1.2550 range
24-HOUR VIEW: "Yesterday, we noted that 'there has been a tentative buildup in momentum.' We held the view that GBP 'could weaken today, but any decline is not expected to reach the major support at 1.2310 (minor support is at 1.2350).' The subsequent price action did not turn out as we expected, with GBP trading in a 1.2363/1.2420 range before closing lower by 0.27% at 1.2367. We continue to detect a tentative buildup in momentum, and this could lead to GBP edging lower today. However, the major support at 1.2310 is still unlikely to come into view. Note that there is a minor support level at 1.2330. The downward pressure will remain intact as long as 1.2405 (minor resistance is at 1.2385) is not breached."
1-3 WEEKS VIEW: "Last Friday (09 Feb, spot at 1.2440), we indicated that 'for the time being, GBP is likely to trade in a 1.2310/1.2550 range.' While there has been a slight increase in downward momentum, we continue to hold the same view for now."
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