Key Moments
- GBP/USD reversed sharply after approaching 1.3600, retreating from a high of 1.3595 to a low of 1.3518.
- UOB strategists now expect intraday GBP/USD moves to be contained within a 1.3495-1.3555 range.
- A drop below 1.3480 would signal that the recent Pound advance has stalled, according to UOB.
Range-Bound Trading Expected After Failed Push Toward 1.3600
Strategists Quek Ser Leang and Lee Sue Ann at United Overseas Bank (UOB) note that GBP/USD lost steam after moving close to the 1.3600 level, triggering a sharp pullback. They now anticipate that intraday downside in the pair is likely to remain contained within a 1.3495-1.3555 band.
The analysts highlight that their prior view allowed for additional Pound gains, but only within a predefined range.
“While we stated yesterday that ‘there is room for GBP to rise,’ we held the view that ‘any advance is likely part of a range of 1.3545/1.3600.’ GBP subsequently rose near to the upper bound of our expected range (high was 1.3595) and then retreated sharply (low was 1.3518).”
Short-Term Technical View and Support Levels
According to UOB, the recent retreat has slightly strengthened downside momentum, but not enough to imply a sustained bearish phase at this stage.
“The slight increase in downward momentum is not strong enough to indicate a continued decline. However, GBP could edge lower, but this time around, any decline is likely part of a 1.3495/1.3555 range. In other words, GBP is unlikely to break clearly below 1.3495.”
The strategists continue to monitor a key support point that would mark a shift in the broader configuration if broken.
“Upward momentum is fading, and the likelihood of further GBP strength is decreasing. From here, a break below 1.3480 (no change in ‘strong support’ level) would suggest that GBP is not strengthening further.”
Key Levels for GBP/USD Highlighted by UOB
| Reference | Level | Comment |
|---|---|---|
| Upper bound of prior expected range | 1.3600 | Price approached this area before reversing |
| Recent high | 1.3595 | Near the previously identified upper bound |
| Recent low | 1.3518 | Marked the sharp intraday retreat |
| New intraday range (lower bound) | 1.3495 | UOB does not expect a clear break below this level |
| New intraday range (upper bound) | 1.3555 | Short-term trading seen within this band |
| Strong support | 1.3480 | Break below would signal fading GBP strength |
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