United Overseas Bank’s (UOB) strategists Quek Ser Leang and Lee Sue Ann report that GBP/USD reversed sharply after nearing 1.3600, with intraday downside now expected to stay within a 1.3495–1.3555 range. Over 1–3 weeks, they see upward momentum fading and the probability of further Pound strength diminishing. A break below 1.3480 would confirm that the recent advance has stalled.

Short-term pullback within defined 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)."

"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."

"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."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)