Further range trading appears likely; soft underlying tone suggests a lower range of 1.2615/1.2685. In the longer run, downward momentum is beginning to slow; a break above 1.2725 would mean that the major support at 1.2565 is out of reach, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Above 1.2725 the major support at 1.2565 is out of reach

24-HOUR VIEW: “We noted yesterday that ‘The price action still appears to be part of a range trading phase.’ We expected GBP to ‘trade between 1.2630 and 1.2710.’ GBP then traded in a 1.2631/1.2713 range, closing at 1.2647, lower by 0.27% for the day. Further range trading appears likely, even though the softened underlying tone suggests a lower range of 1.2615/1.2685.”

1-3 WEEKS VIEW: “We have held a negative view in GBP since early last week. Yesterday (20 Nov), when GBP was at 1.2685, we pointed out that ‘downward momentum is beginning to slow.’ We added, ‘a break above 1.2725 would mean that the major support at 1.2565 is out of reach.’ In London trade, GBP rose briefly to 1.2713, and then pulled back. There has been no increase in momentum, and we continue to hold the same view as yesterday.”