The Pound Sterling (GBP) is expected to consolidate in a 1.2460/1.2540 range. In the longer run, GBP has to break and remain above 1.2550 before a sustained advance can be expected, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
While above 1.2370, GBP can still test 1.2550
24-HOUR VIEW: “When GBP was at 1.2480 yesterday, we indicated that it ‘could rise further, but given the overbought conditions, a sustained break above 1.2530 appears unlikely.’ We also pointed out that ‘support levels are at 1.2450 and 1.2420.” GBP subsequently dipped to 1.2465, rose to 1.2550, closing at 1.2506 (+0.20%). The price action did not result in any further increase in momentum. This, combined with overbought conditions, is likely to lead to consolidation. Expected range for today: 1.2460/1.2540.”
1-3 WEEKS VIEW: “Our latest narrative was from two days ago (04 Feb, spot at 1.2430), wherein ‘for the time being, we expect GBP to trade in a range of 1.2245/1.2530.’ Yesterday, GBP rose above 1.2530, reaching a high of 1.2550. Upward momentum is increasing, but not enough to suggest a sustained advance. For a sustained advance, GBP has to break and remain above 1.2550. The probability of GBP breaking clearly above 1.2550 will remain intact as long as 1.2370 (‘strong support’ level) is not breached.”
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