Prospects for further weakness remain for GBP/USD, although a visit to the 1.1700 region seems out of the question for now, UOB Group currency strategists Lee Sue Ann and Quek Ser Leang suggest.
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24 hour view: “Although we expected GBP/USD to weaken yesterday, we are of the opinion that ‘a break of major support at 1.1800 looks unlikely’. the downside appears to be tapering and this, coupled with oversold conditions, suggests that GBP/USD is unlikely to weaken much further. For today, GBP/USD is more likely to trade between 1.1750 and 1.1885.”
Next 1-3 weeks: “Our last story was from two days ago (July 13, GBP/USD at 1.1880), where we highlighted that while bearish momentum hasn’t improved much, the chance of GBP/USD breaking 1.1800 has increased. that ‘a break of 1.1800 would shift focus to 1.1750’.Yesterday (July 14) GBP/USD broke 1.1800 and fell to 1.1761 before bouncing.The downside momentum still looks a bit lackluster but as long as it is not broken ‘Strong resistance’ level of 1.1940 (1.1980 yesterday’s level), GBP/USD could weaken further. That said, the next major support at 1.1700 may not come into the picture so soon.”
Source: Fx Street
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