The British Pound (GBP) is expected to trade between 1.2510 and 1.2610. Longer term, the sharp decline appears to be overextended; any further decline could struggle to break below 1.2475, note UOB Group FX analysts Quek Ser Leang and Lee Sue Ann.
GBP could find it difficult to break below 1.2475
24 HOUR VIEW: “When GBP was at 1.2550 early yesterday, we indicated the following: ‘As long as GBP remains below 1.2600 (minor resistance is at 1.2575), it could test the support of 1.2505. It is unlikely that the last Friday’s low of 1.2475 is threatened.’ The subsequent price action did not go as we expected with GBP failing to test 1.2505 as it fell to 1.2512 before making a surprisingly strong rebound to a high of 1.2616. GBP retreated from the high to close virtually unchanged at 1.2568 (-0). .02%). Current price movements are probably part of a range trading phase. Today, we expect GBP to trade between 1.2510. and 1.2610.”
1-3 WEEK VIEW: “We have maintained a negative view on GBP since the middle of this month. After GBP plunged to 1.2475 and rebounded strongly, we indicated on Monday (November 25, spot at 1.2590) that ‘the strong fall appears to be overextended.’ We note, ‘any further decline could struggle to break last Friday’s low of 1.2475, which is serving as a significant support level.’ We will continue to maintain the same view as long as 1.2650 (no change in ‘strong resistance’ level) is not surpassed.”
Source: Fx Street
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