The Pound Sterling (GBP) is likely to trade in a range, probably between 1.2890 and 1.2980. In the longer run, GBP must break and remain below 1.2845 before a sustained decline can be expected, UOB Group's FX analysts Quek Ser Leang and Lee Sue Ann note.

24-HOUR VIEW: "After GBP dropped sharply last Thursday, we highlighted on Friday that ‘The sharp drop appears to be overdone, and GBP is unlikely to weaken further.' We held the view that GBP ‘is more likely to trade in a range, probably between 1.2860 and 1.2950.' GBP did not weaken further, but instead of trading in a range, it rose to 1.2980, then pulled back to close at 1.2921. It opened higher today. The price action provides no fresh clues, and we continue to expect GBP to trade in a range, probably between 1.2890 and 1.2980."

1-3 WEEKS VIEW: "Last Thursday, GBP plummeted to a low of 1.2845. In our update from last Friday (01 Nov, spot at 1.2900), we indicated that ‘While there has been a buildup in momentum, GBP must break and remain below 1.2845 before further sustained decline can be expected.' We added, ‘The likelihood of GBP breaking clearly below 1.2845 will remain intact, provided that 1.2985 is not breached.' In NY trade, GBP rose to 1.2980, then pulled back. Downward momentum has slowed, and the chance of GBP breaking below 1.2845 has diminished. However, only a clear break above 1.2985 would indicate that the downside risk has faded."

Source: FXStreet