The cable is now expected to trade within the 1.4080-1.4220 range in the next weeks, noted UOB Group’s FX Strategists.
24-hour view: “We expected GBP to ‘dip below the major support at 1.4100’ yesterday but we were of the view that ‘a break of last week’s low near 1.4080 appears unlikely’. However, GBP dropped to 1.4074 before staging a surprisingly strong and sharp rebound to 1.4178 during late NY hours. The rebound has scope to extend but a clear break of the major resistance at 1.4220 would come as a surprise (1.4195 is already quite a strong level). Support is at 1.4145 followed by 1.4120.”
Next 1-3 weeks: “We highlighted yesterday (10 Jun, spot at 1.4155) that ‘shorter-term downward momentum is beginning to improve’ but we were of the view that GBP ‘has to close below 1.4080 before a sustained decline can be expected’. We added, ‘the prospect for GBP to close below 1.4080 is not high but it would increase further as long as GBP does not move above 1.4185’. GBP subsequently dropped briefly to 1.4074 before rebounding strongly. While 1.4185 is still intact (high of 1.4178 in NY), the build-up in shorter-term momentum has fizzled out. In other words, GBP does not appear to be ready to move lower in a sustained manner. From here, GBP is more likely to trade within a relatively broad range of 1.4080/1.4220.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.