GBP/USD faces the next support at 1.1750 – UOB

In light of the recent price action, GBP/USD could weaken further and meet the next support around 1.1750 according to UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: “The sharp drop in GBP came as a surprise (we were expecting GBP to trade in a range). The sharp and rapid drop is, not surprisingly, oversold. While further sharp decline is unlikely, there is room for GBP to weaken to 1.1790 before stabilization is likely. The next support at 1.1750 is unlikely to come into view today. Resistance is at 1.1860, followed by 1.1900.”

Next 1-3 weeks: “Our latest narrative was from two days ago (06 Mar, spot at 1.2035) where we highlighted that GBP ‘is likely to consolidate, expected to be between 1.1925 and 1.2120’. Yesterday, GBP plunged below 1.1925 (low has been 1.1822). While GBP could weaken further, the pace of any further decline is likely to be slower. Support is at 1.1750. The downside risk is intact as long as GBP stays below 1.1950 in the next few days.”