According to Lee Sue Ann, economist at UOB Group, and Quek Ser Leang, Market Strategist, GBP/USD is likely to continue trading sideways in the short term.
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24 hour view: We indicated yesterday that “there is a slight increase in bullish momentum, and there is room for GBP/USD to break above 1.2790”. However, we are of the opinion that “any advance is unlikely to threaten the main resistance at 1.2830”. As expected, GBP/USD broke above 1.2790 and reached a high of 1.2800. However, we do not anticipate the sharp decline from the high (the low has been 1.2720). The bearish momentum has improved, although not by much. Today, GBP/USD is likely to trade with a bearish bias, but a sustained decline below 1.2690 is unlikely. The next support at 1.2640 is unlikely to be threatened. To the upside, if GBP/USD breaks above 1.2785 (minor resistance is at 1.2755), it would mean that the downside bias has faded.
Next 1-3 weeks: We continue to hold the same view as on Monday (August 21, GBP/USD at 1.2740). As we have highlighted, GBP/USD price developments over the last week appear to be part of a consolidation phase. GBP/USD could continue to trade sideways for now, probably between 1.2640 and 1.2830.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
