GBP/USD now faces some near-term consolidation within 1.1850-1.2080, according to UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.
24-hour view: “We highlighted yesterday that the ‘oversold weakness in GBP could extend to 1.1915 before stabilization is likely’. Our expectation did not materialize as GBP rose to 1.2062 before dropping back down to end the day little changed at 1.1953 (-0.04%). Downward momentum appears to be building, albeit tentatively. As long as GBP does not move above 1.2020 (minor resistance is at 1.1990), GBP is likely to trade with a downward bias today. However, any weakness is unlikely to challenge the major support at 1.1850 (there is another support at 1.1915).”
Next 1-3 weeks: “Our update from yesterday (29 Nov, spot at 1.1965) is still valid. As highlighted, the recent buildup in upward momentum has faded. GBP appears to have moved into a consolidation phase and is likely to trade within a range of 1.1850/1.2080. Looking ahead, a clear break of 1.1850 could signal a deeper drop in GBP.”
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