Still there is room for the pound to retreat to the 1.3850 area in the coming weeks, according to the currency strategists of UOB Group.
24 hour perspective: “We expected the GBP to consolidate and trade within a range of 1.3920 / 1.4030 yesterday. The British pound traded between 1.3905 and 1.3999 before closing little changed at 1.3926 (+ 0.02%). Bearish momentum has improved a bit and the pound could fall below last week’s low of 1.3890. In view of the lackluster momentum, any further decline is unlikely to threaten the main support at 1.3850. The resistance is at 1.3960 followed by 1.3990 ”.
Next 1-3 weeks: “Not much to add to our update yesterday (March 1, par at 1.3975). As highlighted, the current move is seen as the early stages of a corrective pullback. Any pullback is likely to be limited to a test of 1.3850 for now.. On the upside, a break of 1.4050 (previously ‘strong resistance’ level at 1.4110) would indicate that downside risk has dissipated. “
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