GBP/USD: Likelihood of it reaching 1.3210 today is not high – UOB Group

FXStreet Insights Team FXStreet

Despite oversold conditions, the Pound Sterling (GBP) could decline further; the likelihood of it reaching 1.3210 today is not high. In the longer run, to continue to weaken, GBP has to break the major support at 1.3210, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

GBP has to break below 1.3210 to continue falling

24-HOUR VIEW: “We did anticipate the sharp drop in GBP that sent it plummeting to a low of 1.3237. GBP then closed on a weak note at 1.3287, down by 0.67%. The sharp drop is severely oversold, but further decline is not ruled out. However, given the oversold conditions, the likelihood of GBP reaching the major support at 1.3210 today is not high (there is another support at 1.3235). On the upside, any rebound is likely to remain below 1.3330 with minor resistance at 1.3300.”

1-3 WEEKS VIEW: “Yesterday (01 Oct, spot at 1.3375), we indicated that “the current price movements are likely part of a range trading phase, probably between 1.3300 and 1.3430.” We certainly did not anticipate the sharp drop that sent GBP to a low of 1.3237. While the increase in momentum suggests GBP is likely to continue to weaken, it has to break the major support at 1.3210 before further sustained decline is likely. The chance of GBP breaking clearly below 1.3210 appears to be on the high side, provided that it remains below 1.3355.”

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.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD drops to daily lows near 1.1630

EUR/USD now loses some traction and slips back to the area of daily lows around 1.1630 on the back of a mild bounce in the US Dollar. Fresh US data, including the September PCE inflation numbers and the latest read on December consumer sentiment, didn’t really move the needle, so the pair is still on course to finish the week with a respectable gain.

GBP/USD trims gains, recedes toward 1.3320

GBP/USD is struggling to keep its daily advance, coming under fresh pressure and retreating to the 1.3320 zone following a mild bullish attempt in the Greenback. Even though US consumer sentiment surprised to the upside, the US Dollar isn’t getting much love, as traders are far more interested in what the Fed will say next week.

Gold makes a U-turn, back to $4,200

Gold is now losing the grip and receding to the key $4,200 region per troy ounce following some signs of life in the Greenback and a marked bounce in US Treasury yields across the board. The positive outlook for the precious metal, however, remains underpinned by steady bets for extra easing by the Fed.