United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann highlight tentative downside momentum in GBP/USD after the pair slipped to 1.3322 and closed at 1.3342. They see scope for a dip toward 1.3315, while judging 1.3300 as major support and potentially hard to break. On a multi-week horizon, they flag the July low at 1.3274 as the next level if bearish momentum extends.
Pound under pressure toward key floor
“24-HOUR VIEW: When GBP was at 1.3370 in the early Asian session yesterday, we noted that “there has been a tentative build-up in downward momentum.” While we highlighted that GBP “could test last week’s low, near 1.3335,” we held the view that “a continued decline below this level is unlikely.” GBP fell more than expected to 1.3322 before closing 0.20% lower at 1.3342. The increase in downward momentum still appears to be tentative. However, GBP could dip to 1.3315 before the risk of a recovery increases. The major support at 1.3300 is likely out of reach for now. To sustain the momentum, GBP must hold below 1.3370, with minor resistance at 1.3360.”
“1-3 WEEKS VIEW: Last Friday (18 Sep, spot at 1.3360), we indicated that “while the risk remains on the downside, it is unclear whether GBP has sufficient momentum to reach 1.3300.” Although GBP fell to a low of 1.3322 yesterday, there has been no further increase in downward momentum, and it is unclear for now whether GBP can break clearly below this level. On the upside, a breach of 1.3390 (‘strong resistance’ level previously at 1.3435) would mean that the decline from early last week is stabilising.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
