British Pound: UOB forecasts range-bound trading against US Dollar

1.3340 gave way as GBP/USD broke below prior support. United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note that intraday downside momentum remains modest, but is enough to confine trading to 1.3315–1.3365. With earlier bullish momentum fading, they now see the pair trading within 1.3290–1.3390 over a 1–3 week horizon. Longer-term analysis nevertheless continues to indicate potential for rebounds towards 1.3480.

GBP/USD: bullish momentum gives way to range trading

"24-HOUR VIEW: When GBP was at 1.3375 yesterday, we indicated that “the current price movements still appear to be part of a range-trading phase, likely between 1.3355 and 1.3400.” We were incorrect, as GBP fell and broke below 1.3355, reaching a low of 1.3326. Downward momentum has increased, albeit not significantly. Today, GBP could weaken, but based on the prevailing momentum, it should stay within a 1.3315/1.3365 range."

"1-3 WEEKS VIEW: We turned positive on GBP in the middle of the month. In our most recent narrative from last Wednesday (21 Oct, spot at 1.3375), we highlighted that “there is scope for GBP to rise to 1.3440 next.” Yesterday, GBP fell and broke below our ‘strong support’ level at 1.3340 (low has been 1.3326). Upward momentum has faded, and GBP has likely entered a range-trading phase. For the time being, we expect GBP to trade between 1.3290 and 1.3390."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Learn more.)