UOB strategists Quek Ser Leang and Lee Sue Ann describe GBP/USD price action as range-bound after a brief drop to 1.3407, expecting the pair to edge lower toward 1.3430 while keeping 1.3405 as distant support. For the next one to three weeks, they see current moves as part of a 1.3390–1.3510 consolidation, but warn that a weekly close below 1.3300 could trigger a slide toward 1.2945–1.3010.

Sterling consolidates inside broad band

“24-HOUR VIEW: GBP dropped to a low of 1.3407 on Monday and rebounded to close largely unchanged at 1.3456 (+0.02%). Yesterday, we pointed out that “the price action provides no fresh clues,” and we stated that GBP “could trade between 1.3425 and 1.3485.” GBP subsequently traded between 1.3452 and 1.3482. Despite the relatively quiet price action, there has been a tentative increase in downward momentum. Today, we expect GBP to edge down to 1.3430. A break below 1.3430 is not ruled out, but the next support at 1.3405 is likely out of reach. Resistance is at 1.3470, followed by 1.3485.”

“1-3 WEEKS VIEW: There is not much to add to our update from yesterday (02 Jun, spot at 1.3460). As highlighted, “the current price movements are likely part of a range-trading phase between 1.3390 and 1.3510.””

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