A close below the 1.3735 level in GBP / USD appears to be losing momentum., note the currency strategists at UOB Group.
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24 hour view: “We highlighted yesterday ‘the downward pressure has eased and downside risk has more or less dissipated’ and we expected GBP / USD to ‘trade sideways within a 1.3760 / 1.3850 range.’ However, GBP / USD briefly dipped to 1.3742 before recovering to close little changed at 1.3789 (-0.09%). Momentum indicators are mostly flat and we continue to expect GBP / USD to move sideways, expected to be in range. of 1.3755 / 1.3835. “
Next 1-3 weeks: “On Wednesday (July 7, GBP / USD at 1.3800), we indicated that ‘downside momentum is starting to build, but GBP / USD has to close below 1.3735 before a sustained decline can be expected’ Since then, GBP / USD has not been able to move on the downside as it has traded relatively quietly over the past few days. While there is still a chance that GBP / USD will close below 1.3735 , the odds of such a move have diminished. On the upside, a breakout of 1.3880 (unchanged from the “strong resistance” level) would indicate that downside risk has dissipated and GBP / USD could move sideways for a time frame.”
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