The Pound Sterling (GBP) is likely to consolidate between 1.2850 and 1.3020 for the time being, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

GBP is set to test 1.2850

24-HOUR VIEW: “We indicated yesterday that ‘there has been a slight increase in momentum.’ We expected GBP to drift lower, but we pointed out that ‘any decline is unlikely to reach 1.2850, and there is another support level at 1.2875.’ In London trade, GBP fell to a low of 1.2878 and then rebounded, closing unchanged at 1.2906. While we continue to expect GBP to drift lower today, downward momentum has not increased much. In other words, any decline is still unlikely to reach 1.2850. The mild downward pressure is intact provided that the resistance level at 1.2940 is not breached (minor resistance is at 1.2920).”

1-3 WEEKS VIEW: “Last Friday (19 Jul, spot at 1.2950), we highlighted that ‘the recent advance in GBP has come to an end.’ We also highlighted that GBP ‘appears to have entered a consolidation phase, and it is likely to trade between 1.2850 and 1.3020 for the time being.’ While there has been a slight increase in short-term downward momentum, we continue to hold the same view for now.”