British Pound: Downside risk extends toward 1.3300 – UOB

FXStreet Insights Team FXStreet

United Overseas Bank’s (UOB) Quek Ser Leang highlights that GBP/USD remains under pressure after four consecutive daily declines, though short-term momentum has not intensified. Intraday, the British Pound (GBP) is expected to range between 1.3335 and 1.3390. Over 1–3 weeks, risks stay skewed lower toward 1.3350 and possibly 1.3300, while strong resistance is now marked at 1.3435.

Pound-Dollar downside risk but constrained

"24-HOUR VIEW: Following the sharp drop in GBP to 1.3375 on Wednesday, we highlighted the following yesterday, when GBP was at 1.3385: “The sharp decline appears excessive, but there is a chance for GBP to test 1.3350 before stabilisation can be expected. We do not expect the next support at 1.3300 to come into view. On the upside, any recovery should hold below 1.3435, with minor resistance at 1.3410.” We were not wrong, as GBP initially rose to 1.3407 and then plummeted to a low of 1.3337 before closing at 1.3358 (-0.16%). Despite the decline, there has been no further increase in downward momentum, and instead of continuing to decline, GBP is more likely to range-trade between 1.3335 and 1.3390."

"1-3 WEEKS VIEW: Yesterday (17 Sep, spot at 1.3385), we highlighted that the recent “price action continues to suggest further GBP weakness, likely toward 1.3350.” We also highlighted that “a break below this level is not ruled out, but given the deeply oversold short-term conditions, it remains to be seen whether GBP has sufficient momentum to reach the next technical target at 1.3300.” GBP subsequently fell and exceeded 1.3350 with a low of 1.3337. While the risk remains on the downside, conditions remain deeply oversold, and it is unclear whether GBP has sufficient momentum to reach 1.3300. On the upside, a breach of the ‘strong resistance’ at 1.3435 (level was at 1.3460 yesterday) would indicate that the weakness in GBP is stabilising."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

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FXStreet Insights Team

FXStreet

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