GBP/USD: Momentum is beginning to slow – UOB Group
|Pound Sterling (GBP) may edge higher; as momentum is not strong for now, any advance is unlikely to break above 1.2810. In the longer run, momentum is beginning to slow; GBP has to break and hold above 1.2810, or the chance of a rise to 1.2850 will diminish quickly, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.
Below 1.2810, the chance of a rise to 1.2850 to diminish quickly
24-HOUR VIEW: “We expected GBP to trade in a 1.2710/1.2790 range yesterday. It then traded in a narrower range of 1.2725/1.2777, closing modestly higher at 1.2772 (+0.16%). The price action has resulted in a slight increase in momentum. Today, GBP may edge higher, but as momentum is not strong for now, any advance is unlikely to break above 1.2810. Support is at 1.2750; a breach of 1.2725 would indicate that the current mild upward pressure has faded.”
1-3 WEEKS VIEW: “We highlighted last Friday (06 Dec, spot at 1.2760) that ‘there has been a strong surge in momentum,’ and we were of the view that GBP ‘may rise to 1.2850.’ GBP traded in a range over the past couple of days, and upward momentum is beginning to slow. GBP has to break above and hold above 1.2810 within these 1 to 2 days, or the chance of a rise to 1.2850 will diminish quickly. Conversely, a breach of 1.2700 (‘strong support’ level previously at 1.2685) would suggest that it is not ready to head higher to 1.2850.”
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