The Pound Sterling (GBP) is expected to trade in a 1.3325/1.3410 range. In the longer run, current price movements are likely part of a range trading phase between 1.3300 and 1.3430, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.
Trading sideways for the time being
24-HOUR VIEW: “Yesterday, GBP traded between 1.3350 and 1.3423, close to our expected range of 1.3340/1.3420. Momentum indicators are mostly neutral, and further range trading appears likely. Expected range for today: 1.3325/1.3410.
1-3 WEEKS VIEW: “Last Thursday (26 Sep, spot at 1.3325), we indicated that ‘the more than week-long GBP strength has ended.’ We expected GBP to ‘trade in a 1.3200/1.3430 range for the time being.’ After GBP rose to 1.3434, we indicated last Friday (27 Sep, spot at 1.3410) that ‘while upward momentum seems to be building again, it is not enough to indicate the resumption of GBP strength.’ We also indicated that GBP ‘must break and hold above 1.3455 before further advance to 1.3500 can be expected, and the likelihood of it breaking clearly above 1.3455 appears low for now, but it will remain intact as long as 1.3310 is not breached within these few days.’ Yesterday, GBP rose to 1.3423, then pulled back to close largely unchanged at 1.3377 (+0.04%). Although our ‘strong support’ level at 1.3310 has not been breached, the buildup in momentum has largely dissipated. In other words, the current price movements are likely part of a range trading phase, probably between 1.3300 and 1.3430.”
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