Weakness from the start of the month ends – UOB Group

The Pound Sterling (GBP) is likely to trade sideways between 1.3010 and 1.3070. In the longer run, weakness from the start of the month has ended; GBP is likely to trade between 1.2980 and 1.3130 for the time being, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

GBP bulls can try to break above 1.3070

24-HOUR VIEW: “Last Friday, we expected GBP to trade in a 1.2985/1.3050 range. However, it rose to 1.3070, closing higher by 0.29% at 1.3048. Despite the advance, there is no significant increase in momentum. Instead of continuing to rise, GBP is more likely to trade sideways between 1.3010 and 1.3070.”

1-3 WEEKS VIEW: “In our most recent narrative from last Thursday (17 Oct, spot at 1.2990), we indicated that ‘the breach of the major support at 1.3000 sets the stage for further losses.’ We added, ‘Only a breach of 1.3080 (‘strong resistance’ level) would indicate that the weakness from early this month has ended.’ GBP rebounded strongly on Friday, reaching a high of 1.3070. Although our ‘strong resistance’ level has not been breached yet, downward momentum has largely faded. In other words, the weakness in GBP has ended, and for the time being, it is likely to trade in a range between 1.2980 and 1.3130.”