In the opinion of FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, GBP/USD is now expected to navigate within the 1.1465-1.1700 range for the time being.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the rapid build-up in momentum is likely to lead to further advance in GBP’. However, we were of the view that ‘a sustained rise above 1.1605 is unlikely’. Our view was not wrong as GBP subsequently rose to 1.1609 before dropping back down to end the day little changed at 1.1517 (-0.05%). Downward momentum has improved a tad and GBP could edge lower but a sustained decline below 1.1465 is unlikely (next support is at 1.1415). On the upside, a breach of 1.1560 (minor resistance is at 1.1530) would indicate that the current mild downward pressure has eased.”

Next 1-3 weeks: “There is no change to our view from yesterday (06 Sep, spot at 1.1575). As highlighted, the recent GBP weakness has run its course and GBP is likely to consolidate and trade between 1.1465 and 1.1700 for now. Looking ahead, if GBP closes below Monday’s low near 1.1445, it would suggest the weakness in GBP has resumed.”