United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann report that GBP/USD volatility exceeded expectations, with the pair swinging between 1.3376 and 1.3463. They see scope for a retest of 1.3465 but doubt sustained gains, keeping a broader 1.3330–1.3530 range intact over the coming weeks and flagging 1.3300 as a key medium-term support whose break could open deeper downside.

Pound seen capped below major resistance

"24-HOUR VIEW: Yesterday, we held the view that GBP “is likely to trade between 1.3365 and 1.3435.” We underestimated the volatility as GBP dipped to a low of 1.3376, and then during the NY session, rose sharply to 1.3463. Despite the relatively strong rise, upward momentum has not increased significantly. That said, GBP could retest the 1.3465 level before levelling off. A continued rise above 1.3465 is unlikely. The major resistance at 1.3530 is not expected to come under threat. Supports are at 1.3405 and 1.3385. "

"1-3 WEEKS VIEW: Two days ago (19 May, spot at 1.3435), we noted that the recent “downward pressure has eased,” and we indicated that GBP “is likely to range-trade between 1.3330 and 1.3530.” We continue to hold the same view"

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