Further consolidation seems likely; the firmer underlying tone suggests a higher range of 1.3390/1.3465. In the longer run, Pound Sterling (GBP) view is still negative against US Dollar (USD); the next technical target at 1.3320 may not come into view so soon, as it could consolidate first, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Technical target at 1.3320 may not come into view

24-HOUR VIEW: "Following the choppy price action in GBP two days ago, we indicated yesterday that 'despite the sharp fluctuations, the current price movements are likely part of a 1.3360/1.3460 consolidation phase.' We did not expect the sharp decrease in volatility, as GBP traded in a quiet manner between 1.3375 and 1.3421, closing unchanged at 1.3418. Further consolidation seems likely, even though the firmer underlying tone suggests a higher range of 1.3390/1.3465."

1-3 WEEKS VIEW: "We have maintained a negative GBP view since early this month. In our most recent narrative from two days ago (16 Jul, spot at 1.3395), we reiterated that 'GBP view is still negative.' However, we pointed out that 'the next technical target at 1.3320 may not come into view so soon, as it could consolidate first.' Since then, downward momentum has slowed somewhat, but we will maintain our view as long as 1.3490 (‘strong resistance’ previously at 1.3500) is not breached."