Unlikely to break clearly above 1.2655 – UOB Group

Chance for Pound Sterling (GBP) to edge higher vs US Dollar (USD), but it is unlikely to break clearly above 1.2655. In the longer run, further GBP strength appears likely; the focus is at 1.2655, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Further GBP strength appears likely

24-HOUR VIEW: We highlighted yesterday that ‘while there is scope for GBP to continue to edge higher, any advance is likely part of a higher trading range of 1.2580/1.2655.’ We also highlighted that GBP ‘is unlikely to break clearly above 1.2655.’ Our expectation did not quite turn out as after dipping to a low of 1.2583, GBP rose but only touched 1.2628. Although upward momentum has not increased much, there is still a chance for GBP to edge higher today. However, a clear break above 1.2655 still seems unlikely. On the downside, support levels are at 1.2600 and 1.2580.”

1-3 WEEKS VIEW: “Our update from two days ago (17 Feb, spot at 1.2580) is still valid. As highlighted, ‘further GBP strength appears likely, and the focus now is at 1.2655.’ Overall, only a breach of 1.2525 (no change in ‘strong support’ level) would mean that the GBP strength that started late last week has faded.”