The Pound Sterling (GBP) appears to have entered a consolidation and is likely to trade between 1.2705 and 1.2770. In the longer run, there has been a strong surge in momentum; GBP may rise to 1.2850, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

GBP may rise to 1.2850

24-HOUR VIEW: “Last Friday, we expected GBP to ‘continue to rise, potentially breaking above 1.2805.’ However, we were of the view that ‘the major resistance at 1.2850 is likely out of reach for now.’ Our view was not wrong, as GBP broke above 1.2805, reaching a high of 1.2811. The advance was short-lived, as it fell swiftly from the high to close at 1.2741 (-0.15%). GBP appears to have entered a consolidation and is likely to trade between 1.2705 and 1.2770.”

1-3 WEEKS VIEW: “We revised our GBP outlook to positive last Friday (06 Dec, spot at 1.2760), indicating that ‘there has been a strong surge in momentum,’ and it ‘may rise to 1.2850.’ GBP subsequently rose to a 3-week high of 1.2811 before pulling back quickly. While the pullback has decreased the upward momentum somewhat, we continue to hold the view that GBP may rise to 1.2850. That said, should GBP break below 1.2685 (no change in ‘strong support’ from last Friday), it would indicate that the current upward momentum has faded.”