GBP/USD: Downward momentum picks up pace – UOB
|In opinion of FX Strategists at UOB Group, the Cable now faces increasing chances of a move to 1.4080/50 in the near term.
Key Quotes
24-hour view: “Our expectation for the ‘rebound in GBP to extend higher’ last Friday was incorrect as it dropped sharply to 1.4095 instead. Despite the relatively sharp drop, downward momentum has not improved by much. However, there is scope for GBP to test the major support at 1.4080. A dip below this level is not ruled out but the next support at 1.4050 is not expected to come into the picture. Resistance is at 1.4140 followed by 1.4160.”
Next 1-3 weeks: “Last Friday (11 Jun, spot at 1.4175), we indicated that GBP ‘does not appear to be ready to move lower in a sustained manner’ and we expected it to ‘trade within a relatively broad range of 1.4080/1.4220’. GBP subsequently dropped to 1.4095 and shorter-term downward momentum has improved somewhat. That said, it is premature to expect a sustained decline. From here, GBP has to close below 1.4080 before a move to 1.4050 can be expected (next support is at 1.4005). At this stage, the prospect for GBP to close below 1.4080 is not high but it would increase as long as GBP does not move above 1.4185 (‘strong resistance’ level) within these few days.”
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.