GBP/USD: Expected to trade in a 1.3340/1.3420 range – UOB Group

The Pound Sterling (GBP) is expected to trade in a 1.3340/1.3420 range. In the longer run, GBP must break and hold above 1.3455 to resume strength, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

GBP must break and hold above 1.3455 to resume strength

24-HOUR VIEW: “We expected GBP to edge higher last Friday, but we held the view that ‘any advance is unlikely to break above 1.3455.’ GBP subsequently rose, but less than expected, reaching a high of 1.3428. GBP closed lower by 0.32% at 1.3372. Momentum indicators are turning flat, and the current price movements are likely part of a range trading phase. Expected range for today: 1.3340/1.3420.”

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.’ We continue to hold the same view.”