British Pound: Limited upside within defined band against US Dollar – UOB

UOB’s Quek Ser Leang and Lee Sue Ann highlight that GBP/USD closed marginally higher near 1.3510, with price action confined to a narrow 1.3493–1.3515 range. Intraday, they see scope for the Pound to edge higher but still capped within 1.3490–1.3535. Over 1–3 weeks, GBP can test 1.3555, though a sustained rise above that level is viewed as unlikely.

Pound strength seen but constrained

"24-HOUR VIEW: After GBP rose to a high of 1.3530 on Monday, we indicated yesterday that “while GBP could rise further, the combination of slowing momentum and overbought conditions suggests any advance is likely to be contained within a 1.3490/1.3535 range.” The subsequent price movements did not unfold as expected. GBP traded in a narrow sideways range of 1.3493/1.3515, closing marginally higher by 0.01% at 1.3509. Despite the quiet price action, the underlying tone appears to be firm, and there is a chance for GBP to edge higher. However, we continue to hold the view that any advance is likely to be contained within a 1.3490/1.3535 range."

"1-3 WEEKS VIEW: We have held a positive GBP view since last Monday. Yesterday (11 Aug, spot at 1.3510), we indicated that while GBP “could test 1.3555, based on the prevailing momentum, a continued rise above this level appears unlikely.” We also indicated that “to keep the momentum going, GBP must hold above 1.3460 (‘strong support’ level).” There is no change in our view."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)