The Pound Sterling (GBP) is likely to trade in a sideways range of 1.2780/1.2840. Risk for GBP remains on the upside, the level to watch is 1.2860, UOB Group analysts Quek Ser Leang and Lee Sue Ann note.

The level to watch is 1.2860

24-HOUR VIEW: “Last Friday, GBP rose sharply to 1.2817. Yesterday (Monday), we indicated that ‘while the rapid rise is approaching overbought levels, further GBP strength is not ruled out.’ We also indicated that ‘the significant resistance at 1.2860 is highly unlikely to come under threat, and that there is another resistance level at 1.2840.’ GBP subsequently rose to a high of 1.2846 before pulling back to close largely unchanged (1.2807, -0.05%). Conditions remain overbought; this, combined with signs of slowing momentum suggests GBP is unlikely to strengthen further. Today, GBP is more likely to trade sideways, probably in a range of 1.2780/1.2840.”

1-3 WEEKS VIEW: “Our update from yesterday (08 Jul, spot at 1.2805) is still valid. As indicated, the risk for GBP remains on the upside, and the level to watch is 1.2860. On the downside if GBP breaks below 1.2750 (‘strong support’ level was at 1.2840 yesterday), it would mean that the upside risk from last Thursday has faded.”