Scope for the Pound Sterling (GBP) to rebound, but any advance is unlikely to reach 1.2980, otherwise it is likely to consolidate between 1.2850 and 1.3020 for the time being, UOB Group FX strategists Quek Ser Leang and Peter Chia note.

Set to consolidate between 1.2850 and 1.3020

24-HOUR VIEW: “Last Thursday, GBP dropped sharply to a low of 1.2941. On Friday, when GBP was trading at 1.2950, we highlighted that ‘while the decline seems to be running ahead of itself, there is room for GBP to drop to 1.2915 before the risk of a rebound increases.’ We also highlighted that ‘the next support at 1.2850 is unlikely to come under threat.’ While our view for GBP to decline was not wrong, it fell more than expected (low of 1.2901). GBP rebounded upon opening today. Today, there is scope for GBP to rebound further, but any advance is unlikely to reach 1.2980 (minor resistance is at 1.2960). On the downside, support levels are at 1.2920 and 1.2905.”

1-3 WEEKS VIEW: “We continue to hold the same view as last Friday (19 Jul, spot at 1.2950). As highlighted, the recent advance in GBP has come to an end. GBP appears to have entered a consolidation phase, and it is likely to trade between 1.2850 and 1.3020 for the time being.”