GBP/USD: Sharp drop appears to be overextended – UOB Group

FXStreet Insights Team FXStreet

The Pound Sterling (GBP) is expected to trade between 1.2510 and 1.2610. In the longer run, sharp drop appears to be overextended; any further decline may find it difficult to break below 1.2475, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

GBP may find it difficult to break below 1.2475

24-HOUR VIEW: “When GBP was at 1.2550 early yesterday, we indicated the following: ‘As long as GBP remains below 1.2600 (minor resistance is at 1.2575), it could test the 1.2505 support. Last Friday’s low of 1.2475 is unlikely to come under threat.’ The subsequent price action did not turn out as we expected. GBP did not quite test 1.2505, as it dropped to 1.2512 before staging a surprisingly sharp bounce to a high of 1.2616. GBP pulled back from the high to close largely unchanged at 1.2568 (-0.02%). The current price movements are likely part of a range trading phase. Today, we expect GBP to trade between 1.2510 and 1.2610.”

1-3 WEEKS VIEW: “We have held a negative view in GBP since the middle of this month. After GBP plummeted to 1.2475 and rebounded strongly, we indicated on Monday (25 Nov, spot at 1.2590) that ‘the sharp drop appears to be overextended.’ We pointed out, ‘any further decline may find it difficult to break last Friday’s low of 1.2475, which is serving as a significant support level.’ We will continue to hold the same view as long as 1.2650 (no change in ‘strong resistance’ level) is not breached.”

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 falls to near 0.7100 after slipping below 50-day EMA

AUD/USD depreciates after registering minor gains in the previous day, trading around 0.7120 during the Asian hours. The technical analysis of the daily chart shows the pair consolidating sideways within a rectangle pattern, as neither bulls nor bears gain control. The AUD/USD pair is holding a slight bearish tone however as it sits beneath both the nine-day and 50-day EMAs.

160.00: USD/JPY back near intervention territory after upbeat US jobs report

US Nonfarm Payrolls beat expectations by a wide margin in May, with 172K jobs added. The US Dollar rebounds after the release, helping USD/JPY recover from its intraday lows. Warnings from Japanese authorities continue to limit upside potential near the 160.00 threshold.

Gold targets $4,300 amid stronger Dollar

Gold faces increasing selling interest and navigates the area of three-month lows near the $4,300 mark per troy ounce on Friday. The precious metal’s decline comes as traders assess the stronger-than-expected NFP, while the bid bias in the Greenback and higher US Treasury yields also collaborate with the retracement.

Cardano hits five-year low even as Hoskinson clarifies "break" isn't an exit

Cardano (ADA) price is down 10% at press time on Friday, extending losses over 30% so far this week amid Charles Hoskinson's clarification that "break" isn't an exit.

Week ahead – Fed countdown begins amid US inflation data and geopolitical risks

Fed Chair Warsh’s first meeting approaches as key US inflation data could reshape expectations. Oil prices remain elevated as US-Iran talks continue; tariffs also return to the spotlight. ECB is expected to hike; will it be a one-off move or is July live?

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.