Economist Lee Sue Ann and UOB Group Market Strategist Quek Ser Leang suggest that GBP/USD could weaken further and revisit the 1.2350 area in the short term.
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24 hour view: “Our view that GBP/USD would consolidate yesterday was incorrect as it plunged as low as 1.2392 before recovering slightly to end the day at 1.2409 (0.63%). Today as long as it holds below 1.2460 (minor resistance is at 1.2440), it could break the main support at 1.2390. In view of the oversold conditions, the next major support at 1.2350 is unlikely to appear today.”
Next 1-3 weeks: “A week ago, on May 12, when GBP/USD was trading at 1.2515, we indicated that “GBP/USD strength has ended and downside risk is increasing rapidly.” And we added: “If GBP/USD breaks below 1.2445, it could trigger a quick drop to 1.2390”. Although GBP/USD broke above 1.2445, the anticipated “rapid decline” did not materialize. On Monday (May 15, GBP/USD at 1.2455), we highlighted that ” GBP/USD is likely to weaken further to 1.2390, but near-term oversold conditions could slow the pace of any further decline.” Yesterday (May 18), GBP/USD fell to a couple of pips of 1.2390 ( low at 1.2392). GBP/USD is likely to weaken further. A clear break of 1.2390 would indicate that it could fall as far as 1.2350, and even as low as 1.2300. On the upside, break above 1.2500 (previously “strong resistance” level at 1.2560) would indicate that GBP/USD does not weaken further.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
