UOB analysts Quek Ser Leang and Peter Chia highlight a volatile GBP/USD session, with a spike to 1.3712 followed by a drop to 1.3610 and a close near 1.3628. Short-term, they see risk of a brief dip below 1.3600 but doubt an extension to 1.3550. Over 1–3 weeks, they expect range trading between 1.3550 and 1.3700 as upside momentum fades.

Volatility gives way to sideways bias

"We expected GBP to edge lower yesterday, but we were of the view that “any decline is unlikely to break 1.3600.” The subsequent price movements did not unfold as expected."

"GBP rose sharply to a high of 1.3712 and then plunged, touching a low of 1.3610 in the NY session. Despite the sharp drop, downward momentum has not increased significantly."

"That said, GBP could drop below 1.3600, but we do not expect any further decline to reach 1.3550. To keep the momentum going, GBP must hold below 1.3675, with minor resistance at 1.3650."

"Although our ‘strong support’ at 1.3600 has not been clearly breached yet, upward momentum has faded. For the time being, we expect GBP to range-trade, probably between 1.3550 and 1.3700."

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