GBP/USD: Likely to trade in a range between 1.3600 and 1.3665 - UOB Group

Pound Sterling (GBP) is likely to trade in a range between 1.3600 and 1.3665. In the longer run, the odds of GBP rising to 1.3765 have diminished noticeably, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

The odds of GBP rising to 1.3765 have diminished noticeably

24-HOUR VIEW: "GBP rose and reached a high of 1.3671 two days ago. Yesterday, when GBP was at 1.3655, we indicated that 'although overbought, the advance has scope to extend to 1.3700.' However, we pointed out that 'based on the current momentum, a sustained rise above this level is unlikely.' We added, 'the next major resistance at 1.3765 is also unlikely to come into view.' We were not wrong, as GBP rose sharply, but briefly to a high of 1.3726, and then plummeted to a low of 1.3622. The brief rise did not result in any increase in upward momentum. Today, GBP is likely to range-trade, most likely between 1.3600 and 1.3665."

1-3 WEEKS VIEW: "Yesterday (17 Sep, spot at 1.3655), we highlighted that 'there is room for further GBP gains toward 1.3700.' We also highlighted that 'the odds of an extended rise to 1.3765 are currently lower.' GBP then rose to 1.3726 before pulling back to close slightly lower at 1.3630 (- 0.12%). There has been no further increase in upward momentum, and the odds of GBP rising to 1.3765 have diminished noticeably. However, only a breach of 1.3575 (no change in 'strong support' level) would indicate that GBP has moved into a range-trading phase."