Pound Sterling (GBP) is expected to trade in a range of 1.3530/1.3585 against US Dollar (USD). In the longer run, there is a chance for GBP to retest 1.3615 before the risk of a more sustained and sizeable pullback increases, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Chance of reaching 1.3615 is still on the cards
24-HOUR VIEW: “Last Friday, GBP dropped to 1.3508 before rebounding. Yesterday, when GBP was at 1.3540, we indicated that “despite the decline, there has been no clear increase in downward momentum, and GBP is unlikely to weaken much further.” We were of the view that GBP “is more likely to trade in a 1.3515/1.3575 range.” Our view was not wrong, as GBP rose slightly above 1.3575 (high of 1.3582), pulled back to 1.3527, and then recovered to end the day at 1.3550. The price movements still appear to be part of a range trading phase. Today, we expect GBP to trade in a range of 1.3530/1.3585.”
1-3 WEEKS VIEW: “We have maintained a positive outlook on GBP since early last week (as annotated in the chart below). After GBP fell to a low of 1.3508 last Friday, we indicated yesterday (09 Jun, spot at 1.3540) that ‘the price action has led to a slowdown in momentum, but as long as 1.3500 is not breached, there is a chance for GBP to retest 1.3615 before the risk of a more sustained and sizeable pullback increases.’ We maintain our view for now.”
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