Pound Sterling (GBP) is likely to trade in a range of 1.3465/1.3545. In the longer run, further GBP strength is not ruled out, but it is unclear if there is enough momentum for it to reach 1.3595, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

It is unclear if there is enough momentum for GBP to reach 1.3595

24-HOUR VIEW: "After GBP fell more than we expected last Thursday, we stated on Friday that it 'could continue to weaken.' However, we were of the view that 'any decline is likely part of a lower range of 1.3395/1.3460.' We pointed out that GBP 'is unlikely to break clearly below 1.3395.' We were not wrong, as GBP subsequently dipped to a low of 1.3393 before recovering. However, during the NY session, it took off and surged to a high of 1.3544. Deeply overbought conditions suggest GBP is unlikely to rise much further. Today, GBP is more likely to trade in a range of 1.3465/1.3545."

1-3 WEEKS VIEW: "Last Tuesday (18 Aug, spot at 1.3505), we held the view that GBP 'is likely to trade in a range between 1.3415 and 1.3585.' After GBP dropped below 1.3415, we highlighted on Friday (22 Aug, spot at 1.3420) that 'while downward momentum continues to increase, we prefer to wait for a clearer indication (a break and close below 1.3395) before turning negative on GBP.' GBP subsequently tested the 1.3395 level, briefly dipping to a low of 1.3393, before swiftly reversing course, surging to a high of 1.3544. While further GBP strength is not ruled out, it is currently unclear if there is enough momentum for it to reach 1.3595. On the downside, if GBP breaks below 1.3425, it would mean that it is likely to trade within a range instead of strengthening."