Pound Sterling (GBP) is likely to trade in a range of 1.3540/1.3640. In the longer run, GBP must first close above 1.3640 before a move to 1.3700 can be expected, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Likelihood of closing above 1.3640 remains intact above 1.3515
24-HOUR VIEW: “On Wednesday, GBP dropped to 1.3466 before rebounding strongly. In the early Asian session yesterday, when GBP was at 1.3525, we indicated that ‘further rebound is not ruled out, but given the overbought conditions, any advance is unlikely to reach 1.3620.’ We pointed out that ‘support levels are at 1.3535 and 1.3515.’ In the early London session, GBP plummeted to 1.3525 and then reversed sharply to reach 1.3623 in the NY session before closing at 1.3615 (+0.58%). Conditions are deeply overbought, and GBP is unlikely to rise much further. Overall, GBP is more likely to trade in a higher range of 1.3540/1.3640.”
1-3 WEEKS VIEW: “We highlighted yesterday (12 Jun, spot at 1.3565) that GBP ‘appears to have moved into a 1.3495/1.3620 range trading phase.’ GBP subsequently rose to a high of 1.3623, closing at 1.3615 (+0.58%). Upward momentum is increasing, but we prefer to wait for a decisive close above 1.3640 before revising our GBP outlook to positive. The likelihood of GBP closing above 1.3640 will remain intact as long as 1.3515 is not breached. Looking ahead, should GBP close above 1.3640, the focus will shift to 1.3700.”
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