Economist Lee Sue Ann and UOB Group Market Strategist Quek Ser Leang suggest that GBP/USD will meet hard support around 1.2545 before 1.2500.
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24 hour view: After briefly rising to a high of 1.2712 last Friday, GBP/USD plunged to a low of 1.2578 before closing weakly at 1.2590 (-0.65%). Unsurprisingly, the sharp drop has triggered an increase in bearish momentum. Today, GBP/USD is likely to weaken further, but oversold conditions suggest that it may not be able to clearly break below 1.2545 (next support is at 1.2500). Resistance is at 1.2620, followed by 1.2645.
Next 1-3 weeks: In our most recent analysis last Thursday (August 31, GBP/USD at 1.2715), we held the view that “there is a chance for GBP/USD to go as high as 1.2800, with a smaller chance of reaching 1.2845”. Our view was quickly invalidated as GBP/USD slumped on Friday, removing our ‘strong support’ level at 1.2630. The risk appears to have shifted to the downside. However, as bearish momentum is only starting to consolidate, any weakness is likely to be met with solid support at 1.2500 (there is other strong support at 1.2545). As for resistance, if GBP/USD breaks above 1.2680, it would mean that the buildup momentum has faded.
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.
