Sterling Pauses After Drop, UOB Notes Key Trading Levels

Key Moments

UOB Strategists See Limited Downside for GBP/USD

The GBP/USD currency pair is projected to remain confined within a relatively narrow band, with UOB Group expecting trading to occur between 1.3640 and 1.3710 following its recent decline. According to Quek Ser Leang, Senior Technical Strategist, and Peter Chia, Senior FX Strategist at UOB, the recent weakening in the pair has not translated into a fresh wave of downside momentum.

The strategists point out that downward pressure has moderated and that the British pound is currently in oversold territory, which in their assessment reduces the probability of an immediate continuation lower.

Technical Parameters and Key Levels

In their latest assessment, the UOB strategists reiterate their expectation for range-bound behavior in the near term:

“With no further increase in downward momentum, and given that conditions remain oversold, GBP is unlikely to decline further. Today, GBP is more likely to trade in a range, probably between 1.3640 and 1.3710.”

They also reaffirm a previously stated view on the depth of the ongoing pullback:

“We also indicated that ‘the current pullback has scope to extend to 1.3570, and that the likelihood of a clear break below this level is not high.’ We will continue to hold the same view as long as 1.3755 (‘strong resistance’ level was at 1.3805 yesterday) is not breached.”

Key GBP/USD Technical Levels Highlighted