There is room for the British pound to test the 1.3265 level before a recovery is expected. In the longer term, a break below 1.3265 would signal that the advance in sterling since late last month has come to an end, note UOB Group forex analysts Kwek Ser Liang and Peter Chia.
Below 1.3265, GBP’s advance may end
24-hour view: “Yesterday we predicted that GBP would ‘trade in a range between 1.3290 and 1.3350’. GBP then rose briefly to 1.3355 and then fell to a low of 1.3289, before closing lower at 1.3297 (-0.19%). Downward momentum has increased, although not significantly. Today, there is room for a test for GBP 1.3265 Before a recovery is expected based on the current momentum, a clear break below this level is unlikely, and on the upside, resistance levels lie at 1.3330 and 1.3355.
1-3 week view: “After maintaining a positive stance on GBP since late last month, we highlighted yesterday (09 Dec, spot 1.3325) that “upside momentum is starting to slow, and a break below 1.3265 (‘strong support’ level) would indicate that the advance in GBP has come to an end.” There is no change in our view.”
