Pound Sterling (GBP) could rise further, but any advance is unlikely to break clearly above 1.3175. In the longer run, GBP’s weakness has come to an end; it could recover further, but any advance is likely part of a higher range of 1.3050/1.3220, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

GBP’s weakness has come to an end

24-HOUR VIEW: "We did not expect GBP to rise sharply to a high of 1.3142 yesterday, as we were expecting consolidation. GBP closed on a firm note at 1.3140, up by 0.67%. The sharp and swift rise appears to be overdone. However, GBP could rise further, but any advance is unlikely to break clearly above 1.3175. We do not expect the major resistance at 1.3230 to come into view. Support is at 1.3120; a breach of 1.3095 would indicate that GBP is not rising further."

1-3 WEEKS VIEW: "We have held a negative GBP view since late last month (as annotated in the chart below). Two days ago (05 Nov, spot at 1.3025), we highlighted that GBP 'is still negative, but further downside may be limited'. We pointed out that 'if GBP breaks above 1.3120 (‘strong resistance’ level), it would indicate that the weakness in GBP has come to an end'. Yesterday, GBP rose and broke above 1.3120. As stated, the weakness from two weeks ago has ended. From here, there is a chance for GBP to recover, but any advance is likely part of a higher range of 1.3050/1.3220. In other words, GBP is unlikely to break above 1.3220."