Pullback in Pound Sterling (GBP) could extend but is unlikely to threaten 1.3450 (there is another support level at 1.3490). In the longer run, upward momentum has largely faded; GBP is expected to trade in a range of 1.3450/1.3590, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

GBP is expected to trade in a range of 1.3450/1.3590

24-HOUR VIEW: "When GBP was at 1.3580 in the early Asian session yesterday, we highlighted the following: 'GBP could test 1.3610 before leveling off.' Our view was incorrect, as GBP pulled back sharply from a high of 1.3588 and reached a low of 1.3504. The pullback could extend but is unlikely to threaten the major support at 1.3450 (there is another support level at 1.3490). On the upside, resistance levels are at 1.3535 and 1.3560."

1-3 WEEKS VIEW: "Yesterday (24 Jul, spot at 1.3580), we highlighted that 'although the outlook for GBP remains positive, short-term conditions are deeply overbought, and the next resistance at 1.3650 is unlikely to come into view so soon.' We also indicated that 'a breach of the 1.3490 (‘strong support’ level) would indicate that the current upward pressure has eased.' We did not expect it to then pull back sharply to a low of 1.3504. Although 1.3490 has not been breached yet, upward momentum has largely faded. To look at it another way, the GBP strength was shortlived. From here, we expect GBP to trade in a range, most likely between 1.3450/1.3590."