Pound Sterling (GBP) is more likely to consolidate between 1.3475 and 1.3535 towards US Greenback (USD). Within the longer run, a transparent break above 1.3535 would point out that GBP may rise to 1.3575, UOB Group’s FX analysts Quek Ser Leang and Peter Chia observe.
Above 1.3535, GBP can rise to 1.3575
24-HOUR VIEW: “GBP rose sharply two days in the past. Yesterday, whereas we held the view that GBP ‘may strengthen additional’, we indicated that ‘overbought situations counsel that any advance may very well be restricted to a check of 1.3535.’ We added, ‘a transparent break above this degree is unlikely.’ We identified that ‘to maintain the overbought momentum, GBP should maintain above 1.3450, with minor assist at 1.3470.’ Our view turned out to be right, as after dipping to a low of 1.3463, GBP rose to a excessive of 1.3534. The sharp rise over the previous couple of days seems to be overdone, and as an alternative of continuous to advance, GBP is extra more likely to consolidate at present, in all probability between 1.3475 and 1.3535.”
1-3 WEEKS VIEW: “After holding a detrimental GBP view since early this month, we revised our view to impartial yesterday (22 Jul, spot at 1.3485). We indicated that ‘the outlook for GBP has shifted from detrimental to impartial, and it’s more likely to commerce in a spread between 1.3415 and 1.3535.’ We identified that ‘given the buildup in short-term momentum, the chance of GBP breaking above 1.3535 is larger, doubtlessly paving the way in which for a extra sustained advance.’ GBP subsequently rose to a excessive of 1.3534. From right here, a transparent break above 1.3535 would point out that c. The probability of GBP breaking clearly above 1.3535 will stay intact so long as the ‘robust assist’ degree, presently at 1.3455, isn’t breached.”
