GBP/USD: To trade with a downward bias towards 1.2780 – UOB Group

FXStreet Insights Team FXStreet

Increase in momentum suggests further Pound Sterling (GBP) weakness; the major support at 1.2780 is unlikely to come into view for now, UOB Group FX analysts Quek Ser Leang and Peter Chia note.

The major support at 1.2780

24-HOUR VIEW: “We noted yesterday that GBP ‘is under mild downward pressure.’ We expected it to drift lower, but we held the view that ‘any decline is unlikely to reach 1.2850.’ GBP subsequently declined more than expected, reaching a low of 1.2850 in late NY trade. While the increase in momentum suggests further GBP weakness, the major support at 1.2780 is unlikely to come into view today (there is another support level at 1.2820). To keep the momentum going, GBP must stay below 1.2895 with minor resistance at 1.2875.”

1-3 WEEKS VIEW: “Our most recent narrative was from last Friday (19 Jul, spot at 1.2950), wherein GBP ‘appears to have entered a consolidation phase, and it is likely to trade between 1.2850 and 1.3020 for the time being.’ Yesterday, GBP fell and tested the bottom of our expected range at 1.2850. Downward momentum is beginning to build, but at this time, it is premature to expect a significant decline. Overall, provided that the ‘strong resistance’ (level currently at 1.2920) is not breached, GBP is expected to trade with a downward bias towards 1.2780.”

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.

EUR/USD remains on the back foot around 1.1700

EUR/USD is coming under heavy selling pressure, hovering around the 1.1700 region in the latter part of the NA session on Monday. The pair’s severe retracement comes as the US Dollar stages a marked bounce on the back of the prevailing flight to safety atmosphere, as investors react to the escalating conflict in the Middle East.

GBP/USD hits new yearly lows near 1.3300

GBP/USD adds to the recent bearish tone, approaching to the key 1.3300 support to reach fresh YTD troughs against the backdrop of the robust performance of the US Dollar. Indeed, Cable’s decline comes amid the firm demand for the safe-haven space in the wake of the US and Israel attacks to Iran.

Gold eases some ground, approaches $5,300

Gold now surrenders part of the earlier advance, reshifting its attenton to the $5,300 zone per troy ounce at the beginning of the week. Indeed, the yellow metal’s firm performance appears propped up by incresing geopolitical jitters in the Middle East, which at the same time fuels the demand for the safe-haven space.