British Pound: Downside seen limited near 1.3465 against US Dollar – UOB

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note GBP/USD extended its decline to 1.3475 before rebounding, closing at 1.3485. Intraday bias remains lower, but any weakness is seen limited to a test of 1.3465, with 1.3510 marking a shift back to range trading. Over the coming weeks, downside risk persists toward 1.3415, while the broader 1.3210–1.3655 range dominates the 1–3 month outlook.

Pound retains controlled downside bias

"24-HOUR VIEW: The following are excerpts from our update yesterday, when GBP was at 1.3515: “Downward momentum is building tentatively, and today we expect GBP to trade with a downside bias, potentially testing the major support at 1.3480 (there is another support level at 1.3500). To sustain the momentum build-up, GBP must hold below 1.3545, with minor resistance at 1.3530.” GBP subsequently dropped to a low of 1.3475, rebounded to 1.3515 before closing 0.23% lower at 1.3485. Although downward momentum has slowed somewhat, the bias for GBP today remains on the downside. However, any decline is likely limited to a test of 1.3465. On the upside, a breach of 1.3510 would indicate that GBP is likely to range-trade rather than trade with a downside bias."

"1-3 WEEKS VIEW: In our most recent narrative from Monday (31 Aug, spot at 1.3540), we highlighted that “the risk for GBP remains on the downside, and the level to watch is 1.3480.” Yesterday, GBP met the technical target, dropping to a low of 1.3475. While the downside risk for GBP remains intact, there has been no clear increase in downward momentum, and it is left to be seen whether the next technical target at 1.3415 is within reach. On the upside, a breach of 1.3545 (‘strong resistance’ level previously at 1.3570) would indicate that the downward pressure from last Friday has eased."

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