GBP/USD: Expected to trade between 1.3120 and 1.32000 – UOB Group

Pound Sterling (GBP) is expected to trade between 1.3120 and 1.3200. In the longer run, there has been a tentative buildup in momentum, and GBP could test 1.3240, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

A tentative buildup in momentum

24-HOUR VIEW: "GBP dropped to a low of 1.3085 two days ago and rebounded strongly. Yesterday, when it was at 1.3130, we highlighted that 'there is scope for GBP to drop below 1.3100, but the likelihood of a clear break below 1.3085 is not high'. The subsequent price movements did not turn out as expected. GBP dropped to a low of 1.3102, then rose sharply to 1.3215 before pulling back to close at 1.3192 (+0.45%). GBP continues to pullback in the early Asian trade today. There has been no clear shift in directional momentum, and today, we expect GBP to trade in a range between 1.3120 and 1.3200."

1-3 WEEKS VIEW: "Last Friday (07 Nov, spot at 1.3140), we highlighted that GBP 'could recover further but any advance is likely part of a higher range of 1.3050/1.3220'. On Wednesday (11 Nov, spot at 1.3170), we stated that 'while we continue to hold the same view, we now expect a narrower range of 1.3065/1.3230'. After GBP pulled back to a low of 1.3085, we highlighted yesterday (13 Nov, spot at 1.3130) that 'the pullback suggests that GBP is now more likely to trade in a range of 1.3065/1.3185 rather than edging higher'. GBP subsequently rose to 1.3215. There has been a tentative buildup in upward momentum, and from here, GBP could test 1.3240. Based on the current momentum, the likelihood of a clear break above this level is not high. We will maintain our view as long as the ‘’strong support’ level at 1.3095 is not breached."