In the opinion of the currency strategists at UOB Group, GBP / USD is considered to move within the 1.3500-1.3670 range in the coming weeks.
Key Comments:
24 hour vision: “Our expectation for GBP / USD to move higher was incorrect as it fell sharply to 1.3572 before closing weakly at 1.3588 (-0.74%). Despite the sharp decline, the downside momentum has not improved as much. That said, it is too early to expect a recovery. From here, barring a move above 1.3630 (minor resistance is at 1.3605), GBP / USD is likely to weaken to 1.3540. The next support at 1.3500 is not expected to enter the scene for now. “
Next 1-3 weeks: “Our latest narrative last Wednesday (Jan 13, GBP / USD at 1.3670) where we held the view that GBP / USD ‘is expected to trade on a bullish bias, but any advance is expected to face solid resistance at 1.3760 ‘. However, GBP / USD broke our ‘strong support’ level at 1.3590 last Friday and fell to 1.3572. The bullish momentum has faded and risk is starting to turn to the downside. At this time, any weakness is considered part of the 1.3500 / 1.3670 range. Looking ahead, a daily close below 1.3500 would signal the start of a deeper and more sustained pullback. “
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