United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note that GBP/USD closed little changed at 1.3250 after intraday swings, leaving momentum broadly flat and favoring near-term range trading between 1.3205 and 1.3275. However, on a 1–3 week horizon, they still expect further weakness toward 1.3160 as long as 1.3305 strong resistance holds.

Short term range, medium term still soft

“24-HOUR VIEW: When GBP was at 1.3205 in the early Asian session yesterday, we stated that “the current price movements are likely part of a rangetrading phase between 1.3170 and 1.3245.” The subsequent price movements did not unfold as expected. GBP dipped briefly to 1.3180, rebounded to 1.3272 before pulling back to close little changed at 1.3250 (+0.09%). The price action did not result in any clear shift in either downward or upward momentum, and we continue to expect GBP to range-trade today, most likely between 1.3205 and 1.3275.”

“1-3 WEEKS VIEW: We turned negative on GBP last Thursday (18 Jun, spot at 1.3300). In our most recent narrative from Friday (19 Jun, spot at 1.3205), we indicated that GBP “is expected to continue to weaken, and the next level to watch is 1.3160.” Although GBP subsequently rebounded strongly from 1.3164, as long as 1.3305 (no change in ‘strong resistance’ level) is not breached, there is still a chance for GBP to break below 1.3160.”

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