The perspectives of GBP / USD remain lower and the pair could retest the 1.3715 level in the coming weeks, according to currency strategists at UOB Group.
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24 hour view: “Yesterday, we expected GBP / USD to ‘dip below 1.3790’, but we heard that ‘main support at 1.3750 is not expected to enter the picture.’ Our view was not wrong as the GBP decline stopped at 1.3753 Despite the decline, the downside momentum has not improved that much. That said, it is too early to expect a recovery. For today, GBP / USD could fall lower, but the main support at 1.3715 is likely outside. its scope. On the upside, a breakout of 1.3815 (minor resistance is at 1.3790) would indicate that the current bearish pressure has eased. “
Next 1-3 weeks: “We indicated on Wednesday (June 30, GBP / USD at 1.3840) that ‘the downside momentum is starting to improve, but only a close below 1.3790 would indicate the start of a new weak phase in GBP / USD.’ That being said, we do not fully anticipate the steep decline of the GBP / USD to 1.3753 yesterday (July 1) and the weak close at 1.3764. The price action suggests that the GBP / USD has moved into a weak phase. In view of the rapidly improving momentum, a breakout of 1.3750 would not be surprising. The next level to focus below 1.3750 is 1.3715. Looking ahead, the next big support is at 1.3670. The weak phase is considered intact as long as GBP / USD does not move above 1.3845 (the ‘strong resistance level’ was at 1.3905 yesterday). “
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