GBP/USD: Door open for extra retracements – UOB
|Cable still risks further losses in the short-term horizon, noted FX Strategists at UOB Group.
Key Quotes
24-hour view: “The sharp but short-lived plunge in GBP to 1.3195 and the subsequent strong rebound came as a surprise (we were expecting sideway-trading). The volatile price actions have resulted in a mixed outlook. From here, GBP could continue to trade in a choppy manner, albeit likely within a narrower range of 1.3240/1.3355.”
Next 1-3 weeks: “We have expected GBP to weaken since early last week. In our latest narrative from Monday (29 Nov, spot at 1.3330), we indicated that ‘there is room for GBP to drop to 1.3260’. We added, ‘a sustained decline below this level is unlikely’. We did not anticipate the sharp plunge in GBP to 1.3195 yesterday and the subsequent sharp rebound. While further weakness is not ruled out, 1.3195 is a solid support and may not be easy to crack. On the upside, a break of 1.3390 (no change in ‘strong resistance’ level from yesterday) would indicate that the weakness in GBP has run its course.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.