GBP/USD: Upward momentum is starting to slow – UOB Group

Pound Sterling (GBP) is expected to trade between 1.3125 and 1.3175. In the longer run, upward momentum is starting to slow; a breach of 1.3105 would indicate that GBP is likely to range-trade, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Below 1.3105, GBP is likely to range-trade

24-HOUR VIEW: "We expected GBP to 'trade between 1.3125 and 1.3185' yesterday. GBP subsequently traded in a narrower range than expected (1.3135/1.3176). The price action provides no fresh clues, and we continue to expect GBP to trade in a range today, most likely between 1.3125 and 1.3175."

1-3 WEEKS VIEW: "Last Friday (14 Nov, spot at 1.3160), we were of the view that GBP 'could test 1.3240'. However, we pointed out that 'based on the current momentum, the likelihood of a clear break above this level is not high'. After GBP traded sideways for a couple of days, we highlighted yesterday that 'the buildup in upward momentum is starting to slow, and a breach of 1.3105 (‘strong support’ level) would indicate that GBP is more likely to range-trade rather than head higher to test 1.3240'. We continue to hold the same view for now."