The Pound Sterling (GBP) is expected to trade within a narrow range of 1.2940 to 1.2995, according to FX strategists Quek Ser Leang and Lee Sue Ann from UOB Group. A significant move above 1.3000 is necessary for any further upward momentum.
Short-Term Outlook: Consolidation Phase
In their 24-hour view, the strategists noted that GBP did not experience the anticipated pullback that would challenge the 1.2915 support level. Instead, the currency traded between 1.2960 and 1.2995, closing slightly lower at 1.2967, a decrease of 0.17%. This price action suggests that GBP is in a consolidation phase, with expectations for the currency to remain within the 1.2940 to 1.2995 range today.
Medium-Term Outlook: Key Resistance at 1.3000
From a 1-3 week perspective, the strategists highlighted that despite the current overbought conditions, the risk for GBP remains on the upside. Last Friday’s analysis indicated that while the 1.3000 level might not be reached imminently, it remains a critical resistance point. Yesterday, GBP reached a high of 1.2995 before pulling back, underscoring the significance of the 1.3000 threshold.
For further advances, GBP must break above 1.3000. If this occurs, the next level to watch is 1.3045. The upside potential will remain as long as the strong support level at 1.2885 is not breached, adjusted from yesterday’s level of 1.2870.
In summary, while GBP is currently rangebound, the potential for upward movement remains if it can break through the significant resistance at 1.3000. The strategists emphasize the importance of this level for any future gains, with 1.3045 as the subsequent target if 1.3000 is surpassed.
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