Pound Sterling (GBP) is expected to trade with a downward bias toward 1.3395 vs US Dollar (USD); a sustained break below this level seems unlikely. In the longer run, slight increase in downward momentum is likely to lead to GBP trading in a lower range of 1.3330/1.3530, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
GBP also may trade in a lower range of 1.3330/1.3530
24-HOUR VIEW: “Following GBP’s price action two days ago, we noted yesterday that ‘the decline only resulted in a slight increase in downward momentum.’ We also indicated that GBP ‘is likely to trade in a lower range of 1.3480/1.3560.’ We did not expect GBP to drop and close at 1.3458. GBP continues to decline today. Downward momentum is increasing, albeit not significantly. Today, we expect GBP to trade with a downward bias toward 1.3395. A sustained break below this level seems unlikely. Resistance is at 1.3460, followed by 1.3485.”
1-3 WEEKS VIEW: “We have held a positive GBP view since late last week. Yesterday (28 May, spot at 1.3515), we pointed out that ‘upward momentum is beginning to wane.’ We stated that ‘a break below 1.3460 (‘strong support’ level) would mean that 1.3635 is out of reach this time round.’ GBP then broke below 1.3460. Upward momentum has faded. Downward momentum has increased slightly, but currently, this is likely to lead to GBP trading in a lower range of 1.3330/1.3530 rather than of a sustained decline.”
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