GBP/USD: Likely to trade in a range between 1.3295 and 1.3360 – UOB Group
Pound Sterling (GBP) could trade in a range between 1.3295 and 1.3360. In the longer run, for a continued decline, GBP must first close below 1.3295, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
GBP to continue declining, if it falls below 1.3295
24-HOUR VIEW: "Last Thursday, GBP dropped to a low of 1.3309. On Friday, we noted that 'downward momentum has increased, albeit not much.' We were of the view that GBP 'could test the 1.3295 level,' but we pointed out that “based on the current momentum, a sustained drop below this level is unlikely.' The subsequent price movements did not turn out as expected. GBP fluctuated between 1.3289 and 1.3385 before closing slightly lower at 1.3318 (-0.05%). We are not able to derive much insight from the price action. Today, GBP could trade in a range, likely between 1.3295 and 1.3360."
1-3 WEEKS VIEW: "Last Wednesday (22 Oct, spot at 1.3370), we highlighted that 'downward momentum has increased slightly, but rather than a continued decline, GBP is likely to edge lower within a lower range of 1.3310/1.3435.' On Friday (24 Oct, spot at 1.3325), we noted that 'downward momentum has increased further.' However, we indicated that 'for a continued decline, GBP must first close below 1.3295.' In the NY session, GBP rose and tested our ‘strong resistance’ level at 1.3385 (high was 1.3385) and then dropped to a low of 1.3289. GBP close at 1.3318 (-0.05%). As there has been no clear breach of our ‘strong resistance’ level, we continue to hold the same view for now."
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FXStreet Insights Team
FXStreet
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