Pound Sterling (GBP) could trade in a range of 1.3320/1.3370. In the longer run, downward momentum is starting to slow, and the likelihood of a continued decline below 1.3295 is diminishing, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Downward momentum is starting to slow

24-HOUR VIEW: "Yesterday, we were of the view that GBP 'could trade in a range between 1.3295 and 1.3360.' GBP subsequently traded in a range of 1.3311/1.3353, closing slightly higher at 1.3335 (+0.12%). We continue to expect GBP to trade in a range, but the firmer underlying tone suggests it is likely to trade in a higher range of 1.3320/1.3370."

1-3 WEEKS VIEW: "In our most recent narrative from last Friday (24 Oct, spot at 1.3325), we pointed out that “for a continued decline, GBP must first close below 1.3295.” Our condition was not met as GBP traded in a range over the past couple of days. Downward momentum is starting to fade, and the likelihood of a continued decline is diminishing. From here, a breach of 1.3385 (no change in ‘strong resistance’ level) would indicate that GBP has likely moved into a range-trading phase."