GBP/USD: Climbs up towards 1.3215 – UOB Group

The Pound Sterling (GBP) is expected to trade in a 1.3145/1.3215 range. In the longer run, rapid slowdown in momentum suggests the likelihood of GBP rising to 1.3320 has diminished, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann notes.

Rapid slowdown in momentum

24-HOUR VIEW: “While we noted an increase in downward momentum yesterday, we indicated that ‘it does not appear to be enough for GBP to break the strong support at 1.3145.’ However, GBP weakened more than expected, almost breaching 1.3145 as it reached a low of 1.3146. GBP closed at 1.3170 (-0.16%). Despite the decline, downward momentum has not increased much. Instead of continuing to weaken, GBP is expected to trade in a 1.3145/1.3215 range today.”

1-3 WEEKS VIEW: “Our update from yesterday (29 Aug, spot at 1.3195) is still valid. As highlighted, there has been a rapid slowdown in upward momentum. While our ‘strong support’ level at 1.3145 has not been breached yet, the slowdown in momentum suggests the likelihood of GBP rising to 1.3320 has diminished. GBP must break and remain above 1.3250 in the next 1 to 2 days, or a breach of the ‘strong support’ level would not be surprising.”