GBP / USD is likely to trade between 1.3000 and 1.3250 in the coming weeks, have noted the currency strategists of UOB Group.
Key Comments:
24 hour view: “We highlighted yesterday that ‘the bullish momentum has more or less dissipated and the current move is considered part of a consolidation phase.’ Instead of consolidating, however, GBP / USD plunged to a low of 1.3108 before closing. with a weak tone (at 1.3124, -0.75%). While the quick and sharp decline seems overdone, there is room for the British pound to drop first to 1.3080 before the current weakness stabilizes. The next support at 1.3040 is likely to be out of reach. Resistance is at 1.3150 followed by 1.3180 “.
Next 1-3 weeks: “After GBP / USD rallied earlier this week, we indicated on Wednesday (Nov 11, GBP / USD at 1.3265) that ‘further strength in the British pound seems likely even though it is too early to expect a move to yearly highs at 1.3481 ‘. We add, ‘on a short-term note, 1.3380 and 1.3420 are already quite strong resistance levels.’ That said, we were not expecting the steep drop yesterday (Nov 12) which removed our ‘strong support’ level of 1.3120 (low at 1.3108). The rapid loss of momentum suggests that the British pound is not yet ready to rise. From here, GBP / USD could move sideways within a wide 1.3000 / 1.3250 range over a period of time. ”
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Credits: Forex Street
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