GBP / USD may face a deeper pullback following a break below 1.3480, note the currency strategists at UOB Group.
24 hour view: “We were not expecting the sudden sell-off that sent GBP / USD to 1.3522. Although it is deeply oversold, it is too early to expect a rebound. GBP / USD could weaken further but major support at 1.3480 is unlikely to break into. scene today (there is minor support at 1.3500). Resistance is at 1.3570, followed by 1.3610. “
Next 1-3 weeks: “We highlighted yesterday (September 28, GBP / USD at 1.3730) that ‘while the underlying tone has weakened somewhat, a sustained decline in GBP / USD is likely only if it closes below 1.3610’. However, not we were expecting the rapid decline that broke 1.3610 and the strong sell to 1.3522. While short-term conditions are deeply oversold, he is likely to weaken further to 1.3480. Looking ahead, a clear break of 1.3480 could possibly lead to to a more rapid decline (next support is 1.3370). The current negative outlook is considered intact as long as GBP / USD does not move above 1.3650. “