The Pound Sterling (GBP) is expected to trade in a sideways range of 1.3065/1.3135. In the longer run, price action suggests further GBP weakness; the next major support at 1.3000 may not come into view so soon, UOB Group Quek Ser Leang and Peter Chia note.

Moving slowly towards 1.3065

24-HOUR VIEW: “We expected GBP to edge lower yesterday, but we held the view that ‘any decline is likely limited to a test of 1.3050.’ Our view did not materialise, as after dipping briefly to 1.3065 in London trade, GBP traded sideways for the rest of the sessions. Momentum indicators are turning flat. Today, we expect GBP to trade in a sideways range of 1.3065/1.3135.”

1-3 WEEKS VIEW: “We have held a negative view in GBP since the middle of last week. In our most recent narrative from two days ago (07 Oct, spot at 1.3130), we indicated that “although the recent price action suggests further GBP weakness, conditions are oversold, and the next major support at 1.3000 may not come into so soon.” We will continue to hold the same view, as long as 1.3185 (no change in ‘strong resistance’ level from yesterday) is not breached.”