24-hour view: After GBP rose to 1.2428 on Monday and then pulled back, we indicated yesterday that “the pullback from the high in overbought conditions suggests that GBP is unlikely to advance further.” We expected GBP to trade in a range between 1.2300 and 1.2400. However, GBP dipped to 1.2264 before rebounding to close at 1.2299 (-0.33%). The price action lacks momentum, and GBP is likely to trade sideways today, probably between 1.2265 and 1.2350. 

Next 1-3 weeks: After GBP surged last Friday, we highlighted on Monday (06 Nov, spot at 1.2370), that as long as GBP stays above 1.2245, it could rise above 1.2430, possibly reaching the major resistance of 1.2510. GBP then rose to 1.2428 and then pulled back. The pullback reached 1.2264 yesterday and resulted in a loss of upward momentum. However, as long as 1.2245 (no change in ‘strong support’ level) is not breached, there is still a chance for GBP to rise above 1.2430.