GBP/USD: Likely test the top of the 1.2950/1.3070 range - UOB Group

The Pound Sterling (GBP) is facing mild upward pressure; it could edge higher to 1.3035. The major resistance at 1.3070 is not expected to come into view. In the longer run, GBP is expected to trade in a 1.2950/1.3070 range; slightly firm underlying tone suggests it will likely test the top of the range first, UOB Group's FX analysts Quek Ser Leang and Lee Sue Ann note.

Upward momentum appears to be building

24-HOUR VIEW: "We highlighted yesterday that 'The price action still appears to be part of a sideways trading phase.' We expected GBP to 'trade in a 1.2940/1.2995 range.' We did not expect GBP to rise to a high of 1.3018. There has been a slight increase in momentum. Today, there is a chance for GBP to edge higher to 1.3030 before levelling off. The major resistance at 1.3070 is unlikely to come into view. Support is at 1.2990; a breach of 1.2970 would indicate that the current mild upward pressure has eased."

1-3 WEEKS VIEW: "Our latest narrative was from two days ago (28 Oct, spot at 1.2960), wherein 'downward momentum is slowing, and should GBP break above 1.3000 ('strong resistance' level), it would indicate that GBP is not declining further.' Yesterday, GBP rose and broke above 1.3000, reaching a high of 1.3018. Downward momentum has faded. Upward momentum appears to be building, albeit tentatively. While GBP is expected to trade in a 1.2950/1.3070 range for now, the slightly firm underlying tone suggests it will likely test the top of the range first. At this time, a sustained break above this level appears unlikely."