Further weakness could drag GBP/USD towards the 1.2100 area in the coming weeksaccording to Quek Ser Leang, Market Strategist of the UOB Group, and Peter Chia, Senior Currency Strategist.
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24 hour view: Yesterday we maintained the view that “downside risk to GBP/USD is limited.” We expected it to trade in a range of 1.2170/1.2245. Instead of trading in a range, GBP/USD fell to a low of 1.2154. Today, further GBP/USD weakness is not ruled out, but the lack of bearish momentum suggests that the main support at 1.2100 is probably out of reach. Resistance is at 1.2175. If GBP/USD breaks above 1.2195, it would mean that GBP/USD weakness has stabilized.
Next 1-3 weeks: There is not much to add to our update from yesterday (September 26, GBP/USD at 1.2215). As we have highlighted, the GBP/USD weakness that began earlier this month remains in place. GBP/USD could continue to weaken, and the next level to watch is 1.2100. GBP/USD weakness will remain intact as long as it remains below 1.2245 (“strong resistance” level previously at 1.2295).
Source: Fx Street
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