24-hour view: We expected GBP to trade in a range between 1.3045 and 1.3105 yesterday. We did not anticipate the increase in volatility as GBP rose to 1.3124, and then fell sharply to 1.3029. Downward momentum has increased, albeit not much. Today, GBP could edge lower, but a sustained break below 1.3000 appears unlikely (the next support at 1.2935 is highly unlikely to come under threat). Resistance is at 1.3075, followed by 1.3110. 

Next 1-3 weeks: We have held a positive GBP view since early last week. After GBP surged, in our latest narrative from last Friday (14 Jul, spot at 1.3115), we highlighted that as long as GBP stays above 1.3000, the GBP strength is intact. Yesterday, GBP fell to a low of 1.3029. Upward momentum is fading quickly, and the likelihood of GBP rising further is diminishing. However, only a clear break of 1.3000 would indicate that the GBP strength has come to an end.