The British Pound Sterling (GBP) is projected to maintain a relatively stable trading range against the US Dollar (USD), fluctuating between 1.3300 and 1.3400. According to FX analysts Quek Ser Leang and Peter Chia at UOB Group, the present price activity is indicative of a broader range-bound trading pattern, specifically within the 1.3240 to 1.3450 parameters. This suggests a period of consolidation for the GBP/USD pair, as markets digest recent economic data and await further catalysts.
Current price movements are part of a range-trading phase
24-HOUR VIEW: “Our expectation yesterday for the GBP to exhibit a downward bias proved inaccurate. Contrary to the forecast, the GBP experienced a significant surge after briefly declining to a low of 1.3260, subsequently peaking at 1.3402. The subsequent retracement from this high, coupled with overbought market conditions, implies that the GBP is likely to trade within a defined range today, anticipated to be between 1.3300 and 1.3400.” Market participants should therefore anticipate limited directional movement in the immediate short term, with potential for mean reversion within the established boundaries.
1-3 WEEKS VIEW: “In our analysis yesterday (May 6th, with the spot rate at 1.3280), we noted that ‘while the pullback from the late April high of 1.3445 has not gained significant traction, there is scope for the GBP to continue its retracement.’ We further stated, ‘However, it remains uncertain whether the GBP can reach the major support level at 1.3160.’ The subsequent rebound to 1.3402 was unexpected, exceeding our ‘strong resistance’ level at 1.3360. The upward momentum has diminished following this rebound. We now interpret the current price action as part of a range-trading phase, confined within the 1.3240 to 1.3450 levels.” This revised outlook suggests that the previously anticipated downward pressure on the GBP has been mitigated, with the currency now expected to oscillate within the specified range over the next one to three weeks. Traders should monitor key economic releases from both the UK and the US, as these could potentially trigger a breakout from the established range. Factors such as inflation data, employment figures, and central bank policy announcements will be crucial in determining the future trajectory of the GBP/USD pair.
