Pound Sterling (GBP) is expected to continue to range trade US Dollar (USD); firmer underlying tone suggests a higher range of 1.3620/1.3715. In the longer run, week-long positive outlook has been negated; for a continued down-move, GBP must first close below 1.3560, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Week-long positive outlook has been negated

24-HOUR VIEW: "Two days ago, GBP plunged to 1.3563 before rebounding. Yesterday, when GBP was at 1.3650, we highlighted the following: 'The sharp decline appears excessive. This, combined with the rebound from oversold conditions suggests that GBP is likely to trade in a range today, probably between 1.3585 and 1.3705.' GBP subsequently fluctuated between 1.3586 and 1.3676 before closing modestly higher by 0.14% at 1.3645. While we continue to expect range trading today, the firmer underlying tone suggests a higher range of 1.3620/1.3715."

1-3 WEEKS VIEW: "Yesterday (03 Jul, spot at 1.3650), we indicated that the recent 'week-long outlook has been negated.' We highlighted that 'short-term downward momentum is increasing, but it is not strong enough to indicate a sustained decline just yet.' We also highlighted that 'for a continued down-move, GBP must first close below 1.3560.' We will maintain the same view provided that the ‘strong resistance’ at 1.3750 (no change in level) is not breached."