A deeper pullback in GBP/USD appears to be running out of steam, suggested FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.
24-hour view: “We highlighted yesterday that ‘while GBP could continue to weaken, conditions remain oversold and the next support at 1.2040 is likely out of reach for now’. GBP subsequently dropped to 1.2093 before staging a surprisingly sharp rebound (high of 1.2189 in NY). Momentum indicators are turning flat and GBP is likely to consolidate from here. Expected range for today, 1.2120/1.2205.”
Next 1-3 weeks: “We turned negative on GBP two days (29 Jun, spot at 1.2185). As GBP dropped, we highlighted yesterday that GBP could decline further to 1.2040. GBP subsequently dropped to 1.2093 before rebounding strongly. Shorter-term downward momentum is beginning to wane and a break of 1.2205 (no change in ‘strong resistance’ level from yesterday) would indicate that 1.2040 is out of reach this time round.”
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