To trade probably between 1.3020 and 1.3100 – UOB Group

The Pound Sterling (GBP) is expected to trade in a range, probably between 1.3020 and 1.3100. In the longer run, there has been no further increase in momentum; a breach of 1.3125 would suggest that 1.3000 is out of reach, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Breach of 1.3125 to suggest that 1.3000 is out of reach

24-HOUR VIEW: “Yesterday, when GBP was at 1.3070, we expected it to ‘drift lower, potentially breaking below 1.3050.’ We added, ‘due to the lackluster momentum, any decline is unlikely to reach 1.3000.’ GBP did not break below 1.3050 until NY trade, when it dropped to 1.3011 and then rebounded sharply. GBP closed slightly lower at 1.3061 (-0.11%). The price action did not result in any increase in downward momentum. Today, we expect GBP to trade in a range, probably between 1.3020 and 1.3100.”

1-3 WEEKS VIEW: “In our most recent narrative from last Monday (04 Oct, spot at 1.3130), we indicated that “although the recent price action suggests further GBP weakness, conditions are oversold, and the next major support at 1.3000 may not come into view so soon.” Yesterday, GBP dropped to a low of 1.3011. Despite the decline, there has been no further increase in downward momentum. However, only a breach of 1.3125 (‘strong resistance’ level was at 1.3150 yesterday) would suggest that 1.3000 is out of reach this time around.”