The pound appears to be navigating within the 1.3750-1.3950 range in the coming weeks, as suggested by currency strategists from UOB Group.
24 hour perspective: “The sudden strong sell-off in the GBP was a surprise (we expected the pound to trade sideways). Bearish momentum is relatively strong and sterling could continue to decline, but lOversold conditions could ‘cap’ any weakness to a test of 1.3795. The next support at 1.3750 is unlikely to enter the picture. The resistance is at 1.3875 followed by 1.3900. A break of 1.3900 would indicate that the current bearish pressure has eased. “
Next 1-3 weeks: “Our last narrative was from Tuesday (April 20, even at 1.3990) where we indicated that the GBP could advance even further although the next big resistance at 1.4100 might not appear so soon. The sharp drop yesterday (April 22) that The breaking of our ‘strong support’ level at 1.3850 was a surprise (1.3825 low). The breakout of the strong support indicates that the strength of the British pound that started a week ago has reached a high of 1.4009. The current move looks like the early stages of a consolidation phase and the GBP is expected to trade between 1.3750 and 1.3950 for now”.
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