British Pound: Further weakness eyed toward 1.3410 against US Dollar – UOB

UOB’s Quek Ser Leang reports GBP/USD slipped below 1.3475 before rebounding, with intraday trade now expected between 1.3470 and 1.3520. He notes building downside momentum and sees scope for further British Pound (GBP) weakness, though the major support at 1.3410 may not be tested immediately. A break above 1.3540 would signal that 1.3410 is likely out of reach for now.

Pound remains under downside pressure

"24-HOUR VIEW: We expected GBP to “consolidate between 1.3485 and 1.3540” yesterday. Our view was incorrect as GBP fell to a low of 1.3464 before rebounding to close 0.27% lower at 1.3499. The rebound from oversold conditions suggests that instead of continuing to decline, GBP is more likely to trade in a range today, probably between 1.3470 and 1.3520."

"1-3 WEEKS VIEW: Last Friday (11 Sep, spot at 1.3515), we highlighted that “downward momentum is starting to build, and if GBP closes below 1.3495, it will then likely break the next support at 1.3475 as well.” Yesterday, GBP broke below 1.3475 as it fell to a low of 1.3464 before rebounding to close at 1.3499 (-0.27%). While we would have preferred a more decisive close below 1.3495, the price action points to further GBP weakness. That said, the next major support at 1.3410 may not come into view so soon. On the upside, a break above 1.3540 (‘strong resistance’ was at 1.3560 yesterday) would indicate that 1.3410 is out of reach."

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