The Pound Sterling (GBP) is likely to trade in a range between 1.2540 and 1.2620 vs the US Dollar (USD). In the longer run, further GBP strength appears likely; the focus is at 1.2655, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Further GBP strength appears likely

24-HOUR VIEW: "GBP soared and closed higher by 0.99% at 1.2569 last Thursday. On Friday, we highlighted that 'while there appears to be enough momentum for GBP to rise further today, deeply overbought conditions suggest any advance is likely part of a higher 1.2480/1.2600 range.' However, GBP rose more than expected to 1.2631, pulling back to close at 1.2585 (+0.13%). The pullback in overbought conditions suggests that GBP is unlikely to rise much further. Today, it is more likely to trade in a range, probably between 1.2540 and 1.2620."

1-3 WEEKS VIEW: "We highlighted last Friday (14 Feb, spot at 1.2560) that 'the sharp increase in momentum is likely to lead to further GBP strength.' We pointed out that 'the levels to watch are 1.2600 and 1.2655.' We did not quite expect GBP to breach 1.2600 so soon as it rose to 1.2631. Further GBP strength appears likely, and the focus now is at 1.2655. On the downside, should GBP breach 1.2480 (‘strong support’ level was at 1.2450 last Friday), it would mean the current upward momentum has faded."

Source: Fxstreet