GBP/USD: No further increase in momentum – UOB Group
|The Pound Sterling (GBP) is likely to trade sideways, probably in a range of 1.3035/1.3085. In the longer run, there has been no further increase in momentum; a breach of 1.3125 would suggest that 1.3000 is out of reach, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.
Breach of 1.3125 to suggest that 1.3000 is out of reach
24-HOUR VIEW: “We highlighted yesterday that ‘provided that GBP remain below 1.3090 with minor resistance at 1.3070, it is likely to decline.’ We added, ‘the major support at 1.3000 is probably out of reach (there is another support level at 1.3025).’ GBP subsequently declined to 1.3031 before rebounding to close largely unchanged (1.3061, -0.05%). The price movements did not result in any increase in downward momentum, and GBP is likely to trade sideways today, probably in a range of 1.3035/1.3085.”
1-3 WEEKS VIEW: “We have held a negative GBP view for more than a week (see annotations in the chart below). After GBP fell to 1.3011 and rebounded, we highlighted last Friday (11 Oct, spot at 1.3060) that ‘despite the decline, there has been no further increase in downward momentum’. We added, only a breach of 1.3125 (‘strong resistance’ level) would suggest that 1.3000 is out of reach this time around. We continue to hold the same view.”
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