Pound Sterling (GBP) has possible entered a 1.3500/1.3585 consolidation part. Within the longer run, outlook for GBP stays optimistic, and it might rise to 1.3620; the probabilities of it reaching 1.3660 this time round are extra restricted, UOB Group’s FX analysts Quek Ser Leang and Peter Chia observe.
Outlook for GBP stays optimistic
24-HOUR VIEW: “After GBP rose greater than anticipated two days in the past, we indicated the next yesterday: ‘We underestimated the upward momentum, as GBP soared above 1.3555, reaching a excessive of 1.3585. Robust momentum is more likely to outweigh the overbought circumstances, and GBP could check the most important resistance at 1.3620 at the moment. It stays to be seen if it could possibly break and maintain above this stage. To maintain the momentum, GBP should maintain above 1.3530.’ Our assessments have been incorrect, as after edging to a excessive of 1.3594, GBP fell sharply to 1.3521. Upward momentum has light, and GBP has possible entered a consolidation part. Right this moment, we count on GBP to commerce in a variety of 1.3500/1.3585.”
1-3 WEEKS VIEW: “We have now maintained a optimistic GBP stance since late final week (see annotations within the chart under). Monitoring the value actions, we indicated yesterday (14 Aug, spot at 1.3580) that ‘the outlook for GBP stays optimistic, and it might rise to 1.3620.’ Nevertheless, we identified that ‘the probabilities of it reaching 1.3660 this time round are extra restricted.’ We additionally identified that ‘solely a breach of 1.3485 (‘sturdy assist’ stage) would point out that GBP isn’t rising additional.’ We didn’t fairly anticipate the sharp pullback that reached a low of 1.3521. Nonetheless, we are going to keep our view for now so long as 1.3485 is undamaged.”
