Slight increase in upward momentum is likely to lead to a higher range of 1.3475/1.3535 rather than a sustained advance. In the longer run, Pound Sterling (GBP) is likely to continue to range-trade; a narrower range of 1.3420/1.3560 is likely to enough to contain the price movements, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
GBP is likely to continue to range-trade
24-HOUR VIEW: “After our expectation for GBP to test 1.3545 did not materialise, we stated last Friday that ‘the underlying tone still appears firm, and there is a chance for GBP to test 1.3545.’ Our view turned out to be incorrect, as GBP dropped to a low of 1.3447 before staging a sharp and swift rebound to a high of 1.3518. GBP closed marginally lower at 1.3503 (-0.03%). There has been a slight increase in upward momentum, but this is likely to lead to a higher range of 1.3475/1.3535 rather than a sustained advance.”
1-3 WEEKS VIEW: “In our most recent narrative from last Thursday (28 Aug, spot at 1.3500), we stated that GBP ‘is likely to trade in a range between 1.3395 and 1.3575.’ GBP is likely to continue to range-trade, but a narrower range of 1.3420/1.3560 is likely enough to contain the price movements for now.”
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