GBP/USD: Set to consolidate in a range of 1.3420/1.3465 – UOB Group

Momentum indicators are mostly flat; Pound Sterling (GBP) could consolidate in a range of 1.3420/1.3465. In the longer run, rapid increase in momentum could lead to GBP rising to 1.3515, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Rapid increase in momentum could lead to GBP rising to 1.3515

24-HOUR VIEW: "Last Thursday, GBP soared to a high of 1.3448. On Friday, we indicated that 'strong momentum suggests further strength.' However, we pointed out that 'the major resistance at 1.3515 is likely out of reach for now.' We added, 'to maintain the strong momentum, GBP must hold above 1.3395 (with minor support at 1.3425).' Instead of strengthening further, GBP consolidated between 1.3418 and 1.3460, closing largely unchanged at 1.3455 (+0.07%). Momentum indicators are mostly flat, and GBP could continue to consolidate today, most likely in a range of 1.3420/1.3465."

1-3 WEEKS VIEW: "We revised our GBP view to positive last Friday (08 Aug, spot at 1.3445), indicating that 'the rapid increase in momentum could lead to GBP rising to 1.3515.' We will maintain our view as long as 1.3345 (no change in ‘strong support’ level) is not breached."