The upside momentum in GBP/USD appears to be losing traction, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected GBP to ‘consolidate and trade between 1.3560 and 1.3630’. GBP subsequently traded within a range of 1.3588/1.3639 before closing little changed at 1.3603 (+0.04%). Further consolidation appears likely even though the weakened underlying tone suggests a lower range of 1.3565/1.3630.”

Next 1-3 weeks: “Last Thursday (17 Feb, spot at 1.3585), we highlighted that GBP has to close above 1.3645 before a sustained advance is likely. As GBP struggled to move above 1.3645, we highlighted yesterday (21 Feb, spot at 1.3595) that the chance for GBP to move clearly above 1.3645 has diminished. GBP subsequently rose to 1.3639 before easing off. There is no change in our view for now but a breach of 1.3545 (no change in ‘strong support level) would indicate that the risk of a clear break of 1.3645 has dissipated.”