United Overseas Bank’s (UOB) Quek Ser Leang notes GBP/USD remains elevated after last week’s surge, with scope for a modest pullback confined to 1.3320–1.3375 intraday and limited risk of a clear break below 1.3320. Over 1–3 weeks, the bank stays positive, seeing potential for a test of 1.3410 while treating 1.3280 as strong support within a broader range-trading monthly outlook.

Pound advance seen extending cautiously

"24-HOUR VIEW: Last Thursday, GBP surged to 1.3385 and then pulled back. On Friday, we pointed out that “the strong advance appears to be overstretched, but there is still a chance for GBP to retest 1.3385 before the risk of a more sustained and sizeable pullback increases.” We added, “1.3410 is unlikely to come into view.” GBP then rose to 1.3380 before pulling back to close at 1.3353 (+0.04%). While there is scope for GBP to pull back further, any decline is likely to be contained within a 1.3320/1.3375 range. In other words, GBP is unlikely to break clearly below 1.3320."

"1-3 WEEKS VIEW: We turned positive on GBP last Tuesday (30 Jun, spot at 1.3255), indicating that “while GBP could rebound further, it is currently unclear whether any advance can reach 1.3355.” After GBP broke above 1.3355, we highlighted on Friday (03 Jul, spot at 1.3345) that “the advance is overbought, but it could rise further and test 1.3410.” There is no change in our view. Overall, only a breach of 1.3280 (‘strong support’ previously at 1.3265) would indicate that GBP is not rising further."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)