The pound’s ongoing downward movement could extend toward 1.3850, according to currency strategists at UOB Group.
24 hour perspective: We expected the GBP to weaken last Friday, but we were of the opinion that support at 1.3900 was unlikely to enter the picture. However, the British pound fell to 1.3890 before quickly recovering. The bearish momentum has faded and this, coupled with the oversold conditions, suggests that further weakness is unlikely. Is more likely that the pound will consolidate and trade within a range of 1.3920 / 1.4030“.
Next 1-3 weeks: “Not much to add to our update last Friday (Feb 26, par at 1.3975). As highlighted, the recent positive phase in the pound has come to an end. The Current move is considered the early stages of a corrective pullback. Any pullback is likely to be limited to a test of 1.3850 for now.. On the upside, a breakout of 1.4110 (unchanged from the ‘strong resistance’ level) would indicate that downside risk has dissipated. “
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