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GBP/USD: A break of 1.1400 could trigger a drop to 1.1300 – UOB

The GBP/USD risks falling deeper to the 1.1300 region once the 1.1400 level has been cleared, UOB Group FX strategists Lee Sue Ann and Quek Ser Leang suggest.

24 hour outlook: “Our expectations for the pound to trade sideways within a 1.1500/1.1600 range were wrong as the pound fell to as low as 1.1461 during the New York session. Downside momentum is building fast and is likely to the GBP to weaken further.That being said, 1.1400 is solid support and it remains to be seen if it can break this level today. Resistance is at 1.1495 followed by 1.1525″.

Next 1-3 weeks: “Two days ago (Sep 14, pair at 1.1510), we indicated that while the pound was likely to remain under pressure, the chance of it breaking major support at 1.1400 was not high. The pound fell to 1.1461 yesterday and the bearish momentum is improving and the risk of a break of 1.1400 has increased. A break of strong support could trigger a quick sell-off as there is no significant support until 1.1300. To the upside, a break of 1.1590 (‘strong resistance’ level was 1.1630 yesterday) would indicate that the current weakness has stabilized.”

Source: Fx Street

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