GBP/USD now looks to a potential drop to 1.1630 – UOB

Pablo Piovano FXStreet

Further weakness could drag GBP/USD to the 1.1630 region in the next few weeks, note FX Strategists at UOB Group Quek Ser Leang and Peter Chia.

Key Quotes

24-hour view: “We expected GBP to ‘trade sideways between 1.1770 and 1.1870’ last Friday. However, GBP spiked to 1.1900 before plunging to close at 1.1730 (-0.91%). GBP dropped sharply during early Asian hours and the rapid build-up in downward momentum is likely to lead to further decline. That said, the major support at 1.1630 is likely out of reach for now (there is another support at 1.1660). Resistance is at 1.1730 but only a breach of 1.1760 would indicate that the current weakness has stabilized.”

Next 1-3 weeks: “Our latest narrative was from last from Wednesday (24 Aug, spot at 1.1830) where GBP is likely to consolidate and trade between 1.1720 and 1.1930. GBP plummeted to 1.1730 last Friday before breaking clearly 1.1700 during early Asian hours. Downward momentum has improved quickly and the price actions suggest GBP could weaken towards 1.1630. Overall, GBP is expected to trade on its back foot unless it can move above the ‘strong resistance’ level, currently at 1.1800.”

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

AUD/USD bulls regain control above 0.6950 amid USD retreat

AUD/USD regains traction and extends the previous day's bounce from the weekly low, aiming for 0.7000 in Asia on Friday. The overnight pullback in US bond yields keeps the US Dollar below an 18-month high, which in turn offers some support to the pair. Meanwhile, hawkish RBA expectations also keep the major underpinned.

USD/JPY holds gains near 158.00 after Japan's weak Household Spending data

USD/JPY clings to gains around 158.00 after data showed on Friday that Japan's Household Spending fell for the ninth straight month, undermining the Japanese Yen. Meanwhile, the US Dollar remains depressed as the overnight fall in US bond yields counters a hawkish Fed and geopolitical uncertainties, could cap any downside in the pair.

Gold remains range-bound below $4,200

Gold has given up some ground after an initial bullish attempt to reach weekly highs, returning to below the $4,200 mark per troy ounce on Friday. The US Dollar’s strong upside momentum, combined with rising US Treasury yields across the curve, seems to keep further gains in the yellow metal under scrutiny.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?

The Euro is not the sick man of Europe. France's bond market is

EUR/USD remains under pressure, near the 17-month low of 1.1161 reached on Monday. The pair has lost more than 7% since its yearly peak, as concerns over France's public finances increasingly weigh on the single currency. But behind the weakness of the Euro (EUR), the problem does not necessarily lie with the European economy as a whole.