GBP/USD: Bears are set to a test of 1.2695 – UOB Group

FXStreet Insights Team FXStreet

Severely oversold conditions suggest any further decline is likely to be limited to a test of 1.2695. The significant support at 1.2645 is unlikely to come into view today. While outsized decline seems to be overdone, further Pound Sterling (GBP) weakness is not ruled out, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

Immediate support is at 1.2695

24-HOUR VIEW: “We expected GBP to trade in a range yesterday. The sudden sharp lurch lower that sent it plunging by 0.94% (NY close 1.2735) was surprising. The outsized decline is the biggest 1-day drop in about four months. While the weakness has not stabilised, severely oversold conditions suggest any further decline is likely to be limited to a test of 1.2695. The significant support level at 1.2645 is unlikely to come into view today. Resistance is at 1.2765; a breach of 1.2795 would mean that the weakness in GBP has stabilised.”

1-3 WEEKS VIEW: “Last Friday (26 Jul, spot at 1.2855), we highlighted that ‘downward momentum is building, but at this time, it is premature to expect a significant decline.’ We held the view that GBP ‘is likely to trade with a downward bias towards 1.2780.’ GBP subsequently traded slightly lower. Yesterday (01 Aug, spot at 1.2855), we noted that ‘the buildup in momentum is beginning to ease, and if GBP breaks above 1.2895, it would indicate that the downward bias has faded.’ We did not anticipate the subsequent outsized drop, as GBP plunged below 1.2780, reaching a low of 1.2727. While the price action seems to be overdone, further GBP weakness is not ruled out. The next level to monitor is 1.2645. On the upside, the ‘strong resistance’ level has moved lower to 1.2840 from 1.2895.”

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD eyes 0.7150 barrier nine-day EMA

AUD/USD inches higher after registering modest losses in the previous day, trading around 0.7130 during the Asian hours. The technical analysis of the daily chart indicates that the pair is moving sideways within the rectangle pattern, suggesting a consolidation as neither the bulls nor the bears have enough momentum to take control of the market.

USD/JPY trades below 160.00 intervention threshold; bullish bias intact

The USD/JPY pair attracts some sellers during the Asian session amid fears that authorities will step in again to prop up the Japanese Yen. Furthermore, the Israel-Lebanon truce prompts some profit-taking around the US Dollar and exerts downward pressure on the currency pair.

Gold puts its 200-day SMA to the test near $4,420

Gold keeps the bullish stance in place in the latter part of Thursday’s session, although a convincing break above the key $4,500 mark per troy ounce still remains elusive. The precious metal’s advance comes amid the resurgence of some selling interest around the Greenback, improving risk sentiment, and declining US Treasury yields across the board.

Bitcoin’s massive storm is back: Why the sell-off is far from over

Bitcoin price action over the last few weeks has felt less like a normal, healthy correction and more like a slow grinding crash that continues to wreak havoc on holdings and trading accounts. And everything suggests that the dramatic crash isn’t over.

Nonfarm payrolls: Testing the limits of Fed policy patience

The upcoming nonfarm payrolls report for May will provide the final update on the US labor market before Kevin Warsh attends his first policy meeting as the new Fed Chair later this month.

Recession on paper: What really moves the Canadian Loonie now?

Statistics Canada handed the headline writers a gift and the analysts a headache. Real GDP shrank 0.1% on an annualized basis in the first quarter, and with the fourth quarter of 2025 revised down to a 1.0% contraction, that is two negative quarters in a row, the textbook definition of a technical recession and Canada's first since the pandemic.