Pound Sterling (GBP) is likely to range-trade between 1.3365 and 1.3430. In the longer run, there has been no marked increase in downward momentum, but the downside bias toward 1.3325 remains intact, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

No marked increase in downward momentum

24-HOUR VIEW: "We stated yesterday that GBP 'could drop to 1.3385 before recovering.' We also highlighted that 'the major support at 1.3325 is not expected to come into view.' GBP subsequently tested the 1.3385 level, recovered to 1.3437, before dropping back down to a low of 1.3372. GBP closed modestly lower at 1.3404, down by 0.13%. Downward momentum has slowed somewhat. This, combined with oversold conditions, suggests GBP is unlikely to weaken much further. Today, GBP is more likely to range-trade, probably between 1.3365 and 1.3430."

1-3 WEEKS VIEW: "Yesterday (08 Oct, spot at 1.3425), we pointed out that 'there has been a tentative buildup in downward momentum.' We stated that GBP 'could edge lower, but it is unclear if it can reach 1.3325.' Although GBP subsequently dropped to a low of 1.3372, there has been no marked increase in downward momentum. However, as long as GBP holds below the ‘strong resistance’ at 1.3465 (level was at 1.3485 yesterday), the downside bias toward 1.3325 remains intact."