GBP/USD: A break out of the 1.2615/1.2680 zone is needed – UOB Group

The Pound Sterling (GBP) is expected to trade in a sideways range of 1.2615/1.2680. Current price movements are likely part of a consolidation, UOB Group FX strategists suggest.

Consolidation phase looms over the markets

24-HOUR VIEW: “Yesterday, we expected GBP to trade in a sideways range of 1.2625/1.2675. However, GBP spiked briefly to 1.2710 and then pulled back to close largely unchanged at 1.2651 ( 0.04%). The brief advance did not result in any increase in upward momentum. We continue to expect GBP to trade sideways, likely in a range of 1.2615/1.2680.”

1-3 WEEKS VIEW: “We have held a negative view in GBP for about 2 weeks now. Yesterday (01 Jul, spot at 1.2645), we highlighted that ‘momentum is beginning to fade.’ We added, ‘if GBP breaks above 1.2700, it would mean that GBP is not weakening further.’ In NY trade, GBP spiked briefly above 1.2700, reaching a high of 1.2710. The breach of our ‘strong resistance’ level of 1.2700 indicates that GBP is not weakening further. The current price movements are likely part of a consolidation phase. For now, GBP is likely to trade between 1.2600 and 1.2720.”