According to Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, GBP/USD could extend the bearish move to the 1.2305 level in the short term.
Key Quotes
24-hour view: We highlighted last Friday that GBP “is likely to continue to weaken.” We also highlighted that “severely oversold conditions suggest a sustained break below 1.2355 is unlikely.” GBP weakened less than expected as it dropped to 1.2380 before settling at 1.2383 (-0.23%). Conditions remain oversold, but with no signs of stabilisation just yet, GBP could dip to 1.2355 before the risk of a more sustained rebound increases. The major support at 1.2305 is highly unlikely to come into view. Resistance is at 1.2420, followed by 1.2445.
Next 1-3 weeks: Our update from last Friday (15 Sep, spot at 1.2405) is still valid. As highlighted, the weakness in GBP that started about two weeks ago (see annotations in the chart below) has not stabilised, and GBP could continue to weaken. The next level to watch is May’s low near 1.2305. On the upside, a breach of the ‘strong resistance’ level at 1.2485 (no change in level from last Friday) would mean that 1.2305 is out of reach this time around.
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.
Recommended content
Editors’ Picks
EUR/USD loses traction, retreats below 1.0600

EUR/USD lost its recovery momentum and declined below 1.0600 in the American session on Friday, erasing a portion of its daily gains in the process. Nevertheless, the risk-positive market atmosphere after PCE inflation data helps the pair limit its losses.
GBP/USD turns negative on the day below 1.2200

GBP/USD reversed its direction and slumped below 1.2200 in the American session on Friday after rising above 1.2270 earlier in the day. Position readjustments and profit-taking on the last trading day of the quarter seems to be weighing on Pound Sterling.
Gold reverses direction, drops below $1,860

Following a steady rebound toward $1,880 on Friday, Gold price made a sharp U-turn and turned negative on the day near $1,860. Although the 10-year US T-bond yield is down more than 1%, XAU/USD struggles to find demand on the last day of Q3.
DOT confirms trend reversal, eyes retest of $5 after reclaiming key hurdle

Polkadot price seems to be ending its downtrend after shedding 92.91% in the last two years from its all-time high of $55.09. In the last three days, DOT has inflated by 3.3%, breaching a declining trendline and confirming the potential start of an uptrend.
Earnings beat triggers Nike to spike 9%

Nike (NKE) stock has surged over 9% in Friday’s premarket, climbing above $98 per share, following late Thursday’s fiscal first-quarter earnings release. Nike beat pessimistic earnings expectations by more than 23% and hiked its dividend by 9%.