There is scope for Pound Sterling (GBP) to drop below 1.3100; the likelihood of a clear break below 1.3085 is not high. GBP is now more likely to trade in a range of 1.3065/1.3185 rather than edging higher, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Likelihood of a clear break below 1.3085 is not high

24-HOUR VIEW: "Yesterday, we held the view that GBP 'is likely to trade in a range between 1.3120 and 1.3185'. However, during the NY session, GBP dropped sharply to a low of 1.3085. The decline was brief, as GBP rebounded strongly from the low and closed at 1.3133 (-0.12%). The price movements have resulted in a slight increase in downward momentum. Today, there is scope for GBP to drop below 1.3100, but the likelihood of a clear break below 1.3085 is not high. Resistance is at 1.3145, and if GBP breaks above 1.3165, it would indicate that the current mild downward pressure has eased."

1-3 WEEKS VIEW: "Last Friday (07 Nov, spot at 1.3140), we highlighted that GBP 'could recover further but any advance is likely part of a higher range of 1.3050/1.3220'. Two days ago (11 Nov, spot at 1.3170), we stated that “while we continue to hold the same view, we now expect a narrower range of 1.3065/1.3230.” Yesterday, GBP pulled back to a low of 1.3085. The pullback suggests that GBP is now more likely to trade in a range of 1.3065/1.3185 rather than edging higher."