The Pound Sterling (GBP) is likely to trade in a sideways range of 1.2770/1.2820. Risk for GBP remains on the upside; the level to watch is 1.2860, UOB Group FX strategists Quek Ser Leang and Peter Chia note.

The level to watch is 1.2860

24-HOUR VIEW: “Two days ago, GBP rose to 1.2846 and then pulled back. Yesterday, we highlighted that ‘conditions remain overbought; this, combined with signs of slowing momentum suggests GBP is unlikely to strengthen further.’ We were of the view that GBP ‘is more likely to trade in sideways range of 1.2780/1.2840.’ Our view of sideways trading was not wrong, even though GBP traded in a narrower range of 1.2778/1.2821. Further sideways trading seems likely. However, the slightly softened underlying tone suggests a lower range of 1.2770/1.2820.”

1-3 WEEKS VIEW: “Our update from Monday (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 (no change in ‘strong support’ level), it would mean that the upside risk from last Thursday has faded.”