A step away from the 1.2900 level – UOB Group

The Pound Sterling (GBP) could edge higher; there does seem to be enough momentum for it to reach 1.2900. While GBP could rebound, the likelihood of it reaching 1.2950 is not high, UOB Group Quek Ser Leang and Lee Sue Ann note.

To test the 1.2900 level near term

24-HOUR VIEW: “Yesterday, we expected GBP to trade in a sideways range between 1.2780 and 1.2855. However, it traded in a higher range of 1.2798/1.2871, closing modestly higher (1.2854, +0.21%). Upward momentum has increased, albeit just a tad. Today, GBP could edge higher, but there does seem to be enough momentum for GBP to reach 1.2900. Support levels are at 1.2840 and 1.2820.”

1-3 WEEKS VIEW: “We highlighted two days ago (14 Aug, spot at 1.2865) that ‘instead of trading in a range, GBP is likely to rebound further, potentially to 1.2950.’ Since then, GBP has not been able to make much headway on the upside. While we continue to hold the view that GBP could rebound, the likelihood of it reaching 1.2950 is not high. We will hold the same view provided that 1.2780 (no change in ‘strong support’ level) is not breached.”