Ella 
GBP traded between 1.2714-1.2789 yesterday, narrower than our expected range of 1.2700/1.2800. The underlying tone has improved, with GBP likely to edge higher. Any gains are unlikely to threaten the key resistance at 1.2830 (minor resistance at 1.2800) as upward pressure is muted. Support is at 1.2755, then at 1.2725.
Outlook for the next 1-3 weeks: We are bearish on GBP for over a week. Since last Friday (Aug 4 at 1.2715) we noted that “downward momentum has moderated.” However we said “there is a chance for GBP to fall further to 1.2580.” The downside momentum has weakened further and the chances of GBP falling to 1.2580 have decreased . However, only a break of 1.2830 (‘strong resistance’ level unchanged) would suggest that the GBP’s decline has stabilized.
