Instead of continuing to advance, the Pound Sterling (GBP) is more likely to trade sideways between 1.2930 and 1.3010. In the longer run, downward momentum has faded; outlook is unclear, and GBP could trade in a range between 1.2850 and 1.3055, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Short-lived swings result in an unclear outlook

24-HOUR VIEW: “GBP dropped sharply to 1.2835 on Wednesday, and then rebounded. Yesterday (Thursday), we highlighted that GBP ‘could retest the 1.2835 low before stabilisation is likely.’ Our view was incorrect, as GBP soared, reaching a high of 1.3009. GBP then pulled back from the high, closing at 1.2986. The pullback in overbought conditions indicates that instead continuing to advance, GBP is more likely to trade sideways between 1.2930 and 1.3010.”