Pound Sterling (GBP) is prone to commerce in a sideways vary of 1.3540/1.3640 towards US Greenback (USD). Within the longer run, the probability of GBP dropping to 1.3510 is rising, UOB Group’s FX analysts Quek Ser Leang and Peter Chia observe.
Probability of GBP dropping to 1.3510 is rising
24-HOUR VIEW: “GBP dropped to a low of 1.3576 two days in the past after which closed at 1.3602. When GBP was at 1.3625 within the early Asian session yesterday, we acknowledged that ‘regardless of the decline, downward momentum has not elevated considerably, and as a substitute of constant to weaken, GBP is extra prone to consolidate in a variety of 1.3580/1.3660.’ The following value actions didn’t prove as we anticipated. GBP rose to 1.3647, plummeted to 1.3528 earlier than snapping again as much as shut largely unchanged at 1.3592 (-0.06%). The transient drop didn’t result in any enhance in downward momentum. GBP is prone to commerce sideways as we speak, in all probability in a variety of 1.3540/1.3640.”
1-3 WEEKS VIEW: “Final Thursday (03 Jul, spot at 1.3650), we indicated that ‘short-term downward momentum is rising, however it’s not sturdy sufficient to point a sustained decline simply but.’ We additionally highlighted that ‘for a continued down-move, GBP should first shut beneath 1.3560.’ After GBP dropped to a low of 1.3576 on Monday, we indicated yesterday (08 Jul, spot at 1.3625) that ‘whereas downward momentum has elevated additional, we desire to attend for GBP to shut beneath 1.3560 earlier than anticipating a transfer to 1.3510.’ GBP subsequently dropped to a low of 1.3528 earlier than recovering to shut at 1.3593. Downward momentum continues to construct, albeit not by a lot. That stated, the probability of GBP dropping to 1.3510 is rising. General, solely a breach of 1.3680 (‘sturdy resistance’ stage was at 1.3700 yesterday) would point out that the present downward bias has pale.”
