Currency strategists at UOB Group point out that GBP/USD could still break 1.3000 and extend decline to 1.2900 region on the short-term horizon.
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24 hour view: “We highlighted yesterday that ‘while GBP/USD could still break 1.3000, the easing of downside momentum coupled with oversold conditions suggests a sustained decline is unlikely.’ Our expectations did not materialize as GBP/USD rallied to 1.3089 before pulling back to close at 1.3045 (+0.33%). Downside momentum has eased and GBP/USD is likely to consolidate. Expected to be range bound 1.3000/1.3100.”
Next 1-3 weeks: “On Monday (March 14, GBP/USD at 1.3045), we highlighted that GBP/USD could break 1.3000 and if it can close below this support, it is likely to trigger further weakness to 1.2900. GBP/USD touched briefly 1.3000 during early Asian hours yesterday before rallying.While short-term downside momentum is starting to wane, a break of 1.3000 is not ruled out yet.Only a break of ‘strong resistance’ at 1.3140 (no change from yesterday’s level) would indicate that the weak phase in GBP/USD that began more than 2 weeks ago has come to an end.”
Source: Fx Street
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