24-hour view: Yesterday, we expected GBP to trade sideways between 1.2265 and 1.2350. Instead of trading sideways, GBP fell to a low of 1.2243 before recovering slightly to close at 1.2285 (-0.11%). The brief drop to 1.2243 did not result in any increase in downward momentum. We continue to expect GBP to trade sideways, likely in a range of 1.2240/1.2330. 

Next 1-3 weeks: After GBP pulled back sharply on Tuesday, we highlighted yesterday (08 Nov, spot at 1.2295) that the pullback has resulted in a loss of upward momentum. We added, “as long as 1.2245 is not breached, there is still a chance for GBP to rise above 1.2430.” In London trade, GBP broke slightly below 1.2245 (low of 1.2243) before recovering. The breach of ‘strong support’ level at 1.2245 indicates that GBP is not strengthening further. From here, GBP is likely to trade in a range of 1.2180/1.2400.