United Overseas Bank currency strategist Quek Ser Leang reports the British pound has entered a technical pullback phase against the US dollar after reaching an overbought peak at 1.3506, settling back to close at 1.3434. The analyst expects the correction to continue but remain contained within a trading band between 1.3400 and 1.3475 in the near term. UOB’s assessment suggests the pound’s downside remains limited, with a sustained break below the 1.3400 support level viewed as unlikely under current conditions.
The technical reversal follows recent strength in cable that pushed the pair into overbought territory, prompting profit-taking among traders. Foreign exchange desks should monitor whether the pair respects the projected range boundaries as volatility persists amid ongoing macroeconomic crosscurrents between UK and US economic data.
FXnCO Insight
Traders should position for range-bound GBP/USD action between 1.3400–1.3475 rather than directional breakout plays, with buying interest likely emerging near 1.3400 support.
Source: FXStreet