Ella 
After GBP fell to 1.2620 and rebounded, we noted on Friday that “weakening downside momentum and with indicators remaining overbought further losses are unlikely.” We expect GBP to consolidate between 1.2670/1.2770. GBP then fell to 1.2689, surged to 1.2791 before closing at 1.2752 (+0.33%). The current price action may be part of a wide range. Today we expect GBP to trade between 1.2700 and 1.2800.
Last Thursday (August 3), the pound rebounded strongly after falling to 1.2620. In our update since last Friday (04 Aug at 1.2715), we noted that “momentum to the downside has weakened.” However we noted that “GBP still has a chance to fall to 1.2580.” Our view remains unchanged. Overall, only a break of 1.2830 (a ‘strong resistance’ level) would suggest that the GBP’s decline that began more than a week ago has stabilized.
