Chance for Pound Sterling (GBP) to edge higher vs US Dollar (USD), but it is unlikely to break clearly above 1.2655. In the longer run, further GBP strength appears likely; the focus is at 1.2655, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Further GBP strength appears likely
24-HOUR VIEW: We highlighted yesterday that ‘while there is scope for GBP to continue to edge higher, any advance is likely part of a higher trading range of 1.2580/1.2655.’ We also highlighted that GBP ‘is unlikely to break clearly above 1.2655.’ Our expectation did not quite turn out as after dipping to a low of 1.2583, GBP rose but only touched 1.2628. Although upward momentum has not increased much, there is still a chance for GBP to edge higher today. However, a clear break above 1.2655 still seems unlikely. On the downside, support levels are at 1.2600 and 1.2580.”
1-3 WEEKS VIEW: “Our update from two days ago (17 Feb, spot at 1.2580) is still valid. As highlighted, ‘further GBP strength appears likely, and the focus now is at 1.2655.’ Overall, only a breach of 1.2525 (no change in ‘strong support’ level) would mean that the GBP strength that started late last week has faded.”
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