Momentum indicators are turning flat; Pound Sterling (GBP) is expected to trade in a sideways range of 1.2550/1.2615 vs US Dollar (USD). In the longer run, upward momentum is beginning to slow; a breach of 1.2525 would indicate that GBP is not strengthening further, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Upward momentum is beginning to slow
24-HOUR VIEW: “We pointed out yesterday that ‘although upward momentum has not increased much, there is still a chance for GBP to edge higher today.’ However, we were of the view that ‘a clear break above 1.2655 still seems unlikely.’ GBP subsequently rose to 1.2641, pulling back to close at 1.2586 (-0.22%). Momentum indicators are turning flat, and today, we expect GBP to trade in a sideways range of 1.2550/1.2615.”
1-3 WEEKS VIEW: “We turned positive in GBP late last week. After GBP exceeded our initial technical target at 1.2600, we indicated on Monday (17 Feb, spot at 1.2580) that ‘further GBP strength appears likely, and the focus now is at 1.2655.’ Yesterday, GBP rose to 1.2641 and then pulled back. Upward momentum is beginning to slow, but only a breach of 1.2525 (no change in ‘strong support’ level) would mean that GBP is not strengthening further.”