GBP/USD: More likely to trade in a 1.2620/1.2710 range – UOB Group
Instead of weakening, the Pound Sterling (GBP) is more likely to trade in a 1.2620/1.2710 range. In the longer run, outlook for GBP has turned neutral; it is likely to trade between 1.2580 and 1.2750, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.
Outlook for GBP has turned neutral
24-HOUR VIEW: “Last Friday, GBP soared to a high of 1.2750. Yesterday, we indicated that ‘The sharp rise appears to be overdone, and instead of continuing to strengthen today, GBP is more likely to trade in a 1.2670/1.2745 range.’ However, GBP plummeted to a low of 1.2619, rebounding strongly to close at 1.2657 (-0.66%). This time around, the sharp drop seems overdone. In other words, instead of weakening, GBP is more likely to trade in a 1.2620/1.2710 range.”
1-3 WEEKS VIEW: “Last Thursday (28 Nov), when GBP was at 1.2670, we turned positive in GBP, but we indicated that ‘any advance is likely a recovery, potentially testing the resistance at 1.2755.’ After GBP rose to 1.2750 on Friday, we indicated yesterday (02 Dec, spot at 1.2715) that ‘the outlook remains positive, but GBP has to break and hold above 1.2755 before further advance can be expected.’ We added, ‘the likelihood of GBP breaking clearly above 1.2755 will remain intact as long as 1.2630 (‘strong support’ level) is not breached.’ We did not expect GBP to drop to 1.2619. The breach of our ‘strong support’ level indicates that instead of a recovery, GBP is likely to trade in a range, probably between 1.2580 and 1.2750. To put it another way, the current outlook is neutral.”
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FXStreet
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