GBP/USD: Scope for a potential visit to parity – UOB

Pablo Piovano FXStreet

In the opinion of FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, GBP/USD risks a probable drop to the parity zone.

Key Quotes

24-hour view: “While we expected GBP to weaken further yesterday, we were of the view that ‘1.0300 is likely out of reach for now’. However, GBP did not weaken further as it rebounded strongly to a high of 1.0934 before dropping back down to close at 1.0690 (-1.50%). The strong downward pressure has eased a tad and GBP is unlikely to revisit yesterday’s low of 1.0327. For today, GBP could continue to trade in a choppy manner and likely within a wide range of 1.0600/1.0900.”

Next 1-3 weeks: “Our view from yesterday (26 Sep, spot at 1.0600) still stands. As indicated, in view of the impulsive downward acceleration, a further decline in GBP to 1.0000 is not ruled out. That said, deeply oversold short-term conditions suggest GBP could trade above yesterday’s low of 1.0327 for a few days first. On the upside, a break of 1.1000 (no change in ‘strong resistance’ level from yesterday) would indicate that the weakness in GBP from about 2 weeks ago has stabilized.”

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 meets support near 0.7000

AUD/USD fades Monday’s optimism and trades with decent losses in the low 0.7000s ahead of the opening bell in Asia. Indeed, spot fails to capitalise on the offered stance of the Greenback and the relatively easing tensions in the Middle East on Tuesday. In the meantime, the AUD is expected to follow the release of housing data in Oz and Chinese inflation figures, all due on Wednesday.

Japanese Yen steadies near recent lows as ceasefire, Japan intervention threats offset

USD/JPY trades around 160.15 on Tuesday, remaining close to its highest level since April 30 despite a broadly neutral intraday performance. The pair retains an underlying bullish bias, supported by expectations that US monetary policy will remain restrictive, although upside potential is being capped by the risk of intervention from Japanese authorities.

Gold dives to fresh two-month lows, aims to challenge $4,000

The selling pressure now gathers extra pace and sends Gold to new three-month lows near $4,230 per troy punce on Tuesday. That said, the yellow metal resumes its decline on the back of a recovery attempt in the US Dollar and the likelihood of a tighter-for-longer Fed this year.

Zcash Price Forecast: ZEC extends gains, targets $500 as retail demand and momentum strengthen

Zcash (ZEC) gains momentum and trades near $470 at the time of writing on Tuesday, shrugging off a broader risk-off mood primarily driven by geopolitical tensions in the Middle East and macroeconomic uncertainty. Retail activity remains relatively elevated, as reflected in the derivatives market.

Hotter US inflation numbers could further bolster Fed hike bets

Middle East tensions keep inflation risks elevated. Fed hike fully priced in by year end amid strong NFP report. US CPI data on Wednesday (12:30 GMT) to enter the spotlight. Further acceleration in inflation could drive the Dollar higher.

The US economy defies the rules: 100 days into the Oil shock and the recession signal is still missing

More than three months after the start of the Iran war and the resulting disruption to global energy markets, the US economy continues to display remarkable resilience. The conflict has triggered a sharp rise in Oil prices, reignited inflationary pressures and fueled widespread concerns about a potential economic slowdown.