To trade between 1.3270 and 1.3340 – UOB Group

The Pound Sterling (GBP) is likely to trade in a range between 1.3270 and 1.3340. In the longer run, GBP could rise above 1.3350; the potential of it reaching 1.3400 seems low for now, UOB Group FX analysts Quek Ser Leang and Peter Chia note.

GBP can rise above 1.3350

24-HOUR VIEW: “After GBP rose sharply last Thursday, we highlighted on Friday that ‘while the rapid rise appears to be overextended, GBP seems to have enough momentum to test 1.3320 before leveling off.’ We added, ‘the next resistance at 1.3350 is unlikely to come under threat.’ GBP subsequently rose more than expected, reaching a high of 1.3341. Despite the advance, upward momentum has not increased much, and GBP is unlikely to rise further. Today, GBP is more likely to trade in a range, probably between 1.3270 and 1.3340.”

1-3 WEEKS VIEW: “We have held a positive GBP view since early last week (see annotations in the chart below). In our latest narrative from last Friday (20 Sep, spot at 1.3280), we highlighted that ‘while the price action continues to suggest GBP strength, overbought conditions could potentially limit any further advance.’ We added, ‘the next level to watch is 1.3350.’ GBP subsequently rose to 1.3341, closing at 1.3320 (+0.26%). Conditions remain overbought, but the advance is not showing sign of exhaustion just yet. That said, while GBP could rise above 1.3350, the potential of it reaching 1.3400 seems low for now. On the downside, should GBP break below 1.3210 (‘strong support’ level previously at 1.3160), it would mean that GBP is not strengthening further.”