British Pound: Upside fades below 1.3410 against US Dollar - UOB

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann highlight that GBP/USD has been confined to tight ranges around 1.3455, with a slight increase in near-term downside momentum. They expect any intraday decline to stay within 1.3430–1.3475. On a 1–3 week view, momentum has eased and a break of 1.3410 would confirm that the previously eyed 1.3555 resistance is unlikely to be tested soon.

Range-bound trade with softer momentum

"24-HOUR VIEW: Two days ago, GBP edged higher to 1.3486 before closing at 1.3469 (+0.12%). When GBP was at 1.3470 in the early Asian session yesterday, we indicated that “while upward momentum has picked up slightly, it is more likely to result in GBP trading within a higher range of 1.3445/1.3495 rather than signaling the start of a sustained advance.” GBP subsequently traded within a relatively tight range of 1.3449/1.3479. This time around, there has been a slight increase in downward momentum, but any decline is likely to be contained within a range of 1.3430/1.3475."

"1-3 WEEKS VIEW: On Monday (03 Aug, spot at 1.3485), we indicated that “while strong momentum suggests further upside, it remains to be seen whether GBP can break and hold above the significant resistance at 1.3555.” After GBP struggled to extend its advance, we highlighted two days ago (05 Aug, spot at 1.3450) that “upward momentum has since eased, but there is still a chance, albeit not a high one, for GBP to rise toward 1.3555.” Upward momentum continues to ease, and from here, a breach of 1.3410 (no change in ‘strong support’ level) would mean that 1.3555 is not coming into view."

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