In the opinion of the currency strategists of the UOB Group, a drop in GBP/USD to the 1.3050 area seems to be losing momentum for now.
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24 hour view: “Yesterday we highlighted that ‘the bias still appears to be to the downside but any decline is unlikely to threaten the main support at 1.3050’. Our view was incorrect as GBP/USD rallied to 1.3188 before closing at 1.3187 (+ 0.65%).Despite the bounce, momentum to the upside hasn’t improved that much.From here GBP/USD could move higher to 1.3205 before pulling back.Strong resistance at 1.3250 unlikely to be threatened.Support it’s at 1.3130, followed by 1.3100.”
Next 1-3 weeks: “We have held a negative view on GBP/USD for about 2 weeks. In our latest narrative from yesterday (March 9, GBP/USD at 1.3105), we highlighted that while downside risk is intact, oversold conditions suggest a slower pace of decline. We did not expect the strong bounce after 1.3188. No change in our opinion, but after yesterday’s bounce, the chance of GBP/USD moving to 1.3050 has diminished. Overall, only a break of 1.3250 (no change in yesterday’s ‘strong resistance’ level) would indicate that the weak phase is over.”
Source: Fx Street
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