GBP/USD: Likely to trade in a range between 1.3375 and 1.3430 – UOB Group
Pound Sterling (GBP) is likely to trade in a range between 1.3375 and 1.3430. In the longer run, downward momentum is starting to slow, but only a breach of 1.3445 would indicate that the weakness in GBP has stabilised, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Downward momentum is starting to slow
24-HOUR VIEW: "Our view for GBP to 'decline further' last Friday was incorrect, as it rebounded to a high of 1.3414. Despite the rebound, there is no clear increase in upward momentum. Today, GBP is likely to trade in a range, most likely between 1.3375 and 1.3430."
1-3 WEEKS VIEW: "We have held a negative GBP view since the middle of the month. Tracking the subsequent price movements, we highlighted last Friday (26 Sep, spot at 1.3335) that GBP 'is expected to continue to decline, and the next level to watch is 1.3260.' We did not quite expect GBP to rebound to a high of 1.3414. Although downward momentum is starting to slow, we will maintain the same view as long as 1.3445 (no change in ‘strong resistance’ level) holds. A breach of 1.3445 would indicate that the weakness in GBP from more than a week ago (see annotations in chart below) has stabilised."
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