GBP/USD might decline further to 1.3210 – UOB Group

FXStreet Insights Team FXStreet

Renewed downward momentum suggests Pound Sterling (GBP) could decline further to 1.3210, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Downward momentum suggests GBP to continue declining

24-HOUR VIEW: "We noted a 'firmer underlying tone' yesterday, and we were of the view that GBP 'is likely to trade in a higher range of 1.3320/1.3370'. While GBP subsequently edged higher to test 1.3370 (high was 1.3368), it staged a surprisingly sharp drop to a low of 1.3248. The decline appears excessive, but with no signs of stabilization just yet, there is a chance for GBP to test 1.3240. Given the oversold conditions, a sustained drop below this level appears unlikely. The next support at 1.3210 is also unlikely to come into view. Resistance is at 1.3295; a breach of 1.3310 would indicate that the weakness is stabilizing."

1-3 WEEKS VIEW: "Last Friday (24 Oct, spot at 1.3325), we highlighted that 'for a continued decline, GBP must first close below 1.3295'. Our condition was not met, and yesterday (28 Oct, spot at 1.3340), we indicated that 'downward momentum is starting to fade, and the likelihood of a continued decline is diminishing'. We added, 'a breach of 1.3385 (‘strong resistance’ level) would indicate that GBP has likely moved into a range-trading phase'. We did not expect the subsequent sharp drop that reached a low of 1.3248. The renewed downward momentum suggests GBP could decline further to 1.3210. On the upside, the ‘strong resistance’ level is now at 1.3340 instead of 1.3385."

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 sticks to positive bias above 0.7100; lacks bullish conviction

AUD/USD trades with a positive bias for the second straight day, holding above 0.7100 in the Asian session on Friday as softer US bond yields keep US Dollar bulls on the back foot. Furthermore, hawkish RBA Governor Bullock's comments boost rate hike bets and support the Aussie. However, the Fed's hawkish outlook, along with geopolitical uncertainties, limits USD losses and caps the pair.

USD/JPY approaches 158.00 as Japanese Yen resumes decline

USD/JPY is resuming its upside in the European session on Friday, refreshing two-week highs and nearing 158.00. The Japanese Yen extends losses, despite the Bank of Japan's (BoJ) expected rate hike to 1.25% and hawkish Governor Ueda's comments, as two surprise dissents against the rate hike weigh on it.

Gold keeps the bid tone in place; still below $4,400

Gold adds to the optimism seen in the second half of the week, trading with decent gains just below the $4,400 mark per troy ounce on Friday. The precious metal’s advance finds traction in declining crude oil prices and fresh selling pressure on the US Dollar.

Why altcoin season isn't coming back — and what stole its capital

If, after two years of being frozen in ice, Katara and Sokka woke you up to the crypto market, it would seem like 100 years have passed. With Bitcoin soaring to record highs just over a year ago, everyone expected a routine altcoin season, where investors take profits from the top crypto to chase higher returns in altcoins.

BoJ Recap: Not as hawkish as expected

The BoJ raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks. Governor Kazuo Ueda said the policy phase had changed.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.