Scope for Pound Sterling (GBP) to edge higher vs US Dollar (USD), but any advance is likely part of a higher trading range of 1.2580/1.2655. Further GBP strength appears likely; the focus is at 1.2655, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Further GBP strength appears likely

24-HOUR VIEW: "After GBP rose to 1.2631 last Friday and then pulled back, we indicated yesterday that 'the pullback in overbought conditions suggests that GBP is unlikely to rise much further.' We expected GBP to 'trade in a range between 1.2540 and 1.2620.' However, GBP edged to a high of 1.2635 before closing at 1.2626 (+0.33%). While there is scope for GBP to continue to edge higher, any advance is likely part of a higher trading range of 1.2580/1.2655. In other words, GBP is unlikely to break clearly above 1.2655."

1-3 WEEKS VIEW: "There is not much to add to our update from yesterday (17 Feb, spot at 1.2580). As highlighted, 'further GBP strength appears likely, and the focus now is at 1.2655.' On the downside, a breach of 1.2525 (‘strong support’ level was at 1.2480 yesterday) would suggest that GBP is not strengthening further."