The Pound Sterling (GBP) against the US Dollar (USD) has witnessed notable developments, according to the UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann.
Currently, it appears that the GBP has entered a period of consolidation and is likely to trade within the range of 1.2705 and 1.2770. Looking further ahead, however, there has been a significant surge in momentum, and there’s a possibility that the GBP could rise to 1.2850.
In the 24-HOUR VIEW, last Friday, the analysts had expected the GBP to “continue to rise, potentially breaking above 1.2805,” yet they also thought that “the major resistance at 1.2850 is likely out of reach for now.” Their assessment wasn’t entirely off the mark, as the GBP did manage to break above 1.2805, reaching a high of 1.2811. However, this upward movement was short-lived, as the currency quickly dropped from that high and closed at 1.2741, registering a decline of 0.15%. This led to the perception that it has now entered a consolidation phase with the aforementioned likely trading range.
Shifting to the 1-3 WEEKS VIEW, the analysts revised their outlook for the GBP to a positive one last Friday (when the spot was at 1.2760). They pointed out that “there has been a strong surge in momentum” and that it “may rise to 1.2850.” Subsequently, the GBP did climb to a 3-week high of 1.2811 before pulling back rapidly. Although this pullback has somewhat dampened the upward momentum, the analysts still maintain their view that the GBP may reach 1.2850. Nevertheless, if the GBP breaks below 1.2685 (with no change in the “strong support” level from last Friday), it would suggest that the current upward momentum has dissipated.
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