24-hour view: We indicated yesterday that “there is a slight increase in upward momentum, and there is room for GBP to edge above 1.2790.” However, we were of the view that “any advance is unlikely to threaten the major resistance at 1.2830.” As expected, GBP edged above 1.2790 and reached a high of 1.2800. However, we did not anticipate the sharp drop from the high (low has been 1.2720). Downward momentum has improved, albeit not much. Today, GBP is likely to trade with a downward bias, but a sustained decline below 1.2690 is unlikely. The next support at 1.2640 is unlikely to come under threat. On the upside, if GBP breaks above 1.2785 (minor resistance is at 1.2755), it would mean that the downward bias has faded.

Next 1-3 weeks: We continue to hold the same view as Monday (21 Aug, spot at 1.2740). As highlighted, the price actions in GBP over the past week or so appears to be part of a consolidation phase.  For the time being, GBP could continue to trade sideways, likely between 1.2640 and 1.2830.