There is a chance for Pound Sterling (GBP) to test 1.3580 before the risk of a pullback increases. In the longer run, outlook appears mixed; GBP could trade in a range of 1.3420/1.3655 for now, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
24-HOUR VIEW: “After GBP fell sharply after opening yesterday, we indicated that ‘downward momentum is building, and GBP may retest the 1.3385 level, but a sustained break below this level seems unlikely for now.’ Our view was not wrong, as GBP dropped to a low of 1.3373. That said, we did not expect GBP to soar from the low. GBP closed at 1.3527 before extending its gains today. The rapid rise appears overstretched, but there is a chance for GBP to test 1.3580 before the risk of a pullback increases. The major resistance at 1.3655 is not expected to come into view. Support levels are at 1.3525 and 1.3485.”
1-3 WEEKS VIEW: “In our latest narrative from last Thursday (19 Jun, spot at 1.3415), we indicated that ‘downward momentum is beginning to build, but it may take a while before 1.3335 comes into view.’ Yesterday, GBP dropped to a low of 1.3373 and then, in an abrupt move, soared above our ‘strong resistance’ level of 1.3520. The breach of our ‘strong resistance’ indicates that the momentum buildup has faded. After the sharp swings, the outlook appears mixed, and GBP could trade in a range of 1.3420/1.3655 for now.”
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