In the opinion of UOB Group currency strategists, GBP / USD could fall back to the 1.4055 region In the next weeks.
Key Comments:
24 hour view: GBP / USD fell to 1.4114 yesterday before closing at 1.4121 (-0.20%). The British pound extended its decline during the Asian session and it seems likely that the strong support at 1.4100 will break. That said, the next big support at 1.4055 is unlikely to be threatened. Resistance is at 1.4130 followed by 1.4155 “.
Next 1-3 weeks: “We have held the same view since last Friday (May 21, GBP / USD at 1.4185) when ‘it is too early to expect GBP / USD to move into a new positive phase.’ / USD has to close above 1.4235 before a move to 1.4290 can be expected. Subsequently, the British pound moved mainly sideways before falling to 1.4114 yesterday (May 26). Bearish momentum is starting to build. improve and GBP / USD could drop to 1.4055. At this time, the possibility of a sustained decline below 1.4055 is not high, but would rise further unless GBP / USD moves above the ‘strong resistance’ level. “at 1.4180 in these few days. Looking ahead, the next support below 1.4055 is at 1.4000”.
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