In the opinion of the currency strategists at UOB Group, GBP / USD will remain within the 1.4090-1.4250 range for the moment.
Key Comments:
24 hour view: “We highlighted yesterday that ‘there is scope for the British pound to rise above the main resistance at 1.4235’, but we are of the opinion that ‘the next resistance at 1.4265 is unlikely to enter the picture’. While our opinion was not wrong, already As GBP / USD rose to 1.4250, we do not anticipate the subsequent decline from the high (US session low at 1.4147). The rapid decline has room to extend, but oversold conditions suggest that any weakness is likely to be limited to a test. 1.4120. Next support at 1.4090 is unlikely to be threatened. On the upside, a breakout of 1.4190 (minor resistance is at 1.4170) would indicate that current weakness has stabilized. “
Next 1-3 weeks: “Last Friday (May 28, GBP / USD at 1.4200), we highlighted that GBP / USD ‘has to close above 1.4235 before a sustained advance can be expected.’ While the pair rose above 1.4235 yesterday (June 1), it fell sharply after hitting 1.4250. The short-term momentum buildup has faded and GBP / USD is unlikely to close above 1.4235. From here, the pair is more likely moves within a range of 1.4090 / 1.4250 “.
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