In the opinion of the currency strategists at UOB Group, a further decline in GBP/USD should face strong support around 1.3250 in the short term.
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24 hour view: “We were expecting GBP/USD to weaken yesterday, but are of the opinion that ‘any weakness is expected to find solid support at 1.3500’. However, GBP/USD broke not only 1.3500, but also some other important support levels with ease as it slumped to 1.3273 before rallying Deeply oversold conditions suggest GBP/USD is unlikely to weaken further For now GBP/USD is more likely to consolidate and trade between 1.3320 and 1.3450.”
Next 1-3 weeks: “The sudden sharp drop in GBP/USD yesterday came as a surprise. The oversized drop appears to be overdone, but only a break of 1.3505 (“strong resistance” level) would indicate that the current weakness has stabilized. In other words, Further GBP/USD weakness is not ruled out. That being said, yesterday’s low 1.3273 is not far above important support at 1.3250. On the upside, a break of 1.3505 would indicate that the current weakness has stabilized.”
Source: Fx Street
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