GBP/USD could continue to fall in the coming weeks, suggest UOB Group currency strategists Lee Sue Ann and Quek Ser Leang.
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24 hour view: “Although we expected GBP/USD to weaken last Friday, we note that “it remains to be seen if GBP/USD can break the strong support at 1.1400 today”. However, GBP/USD easily broke 1.1400 as it slumped as low as 1.1351 earlier. to recover to end the day at 1.1422 (-0.44%) Rebound amid oversold conditions and easing of bearish momentum suggests GBP/USD is unlikely to weaken further For today, more likely to GBP/USD to consolidate within a range of 1.1380/1.1480.”
Next 1-3 weeks: “We turned negative on GBP/USD last Wednesday (Sep 14, GBP/USD at 1.1510). As GBP/USD moved lower, in our last account last Friday, we indicated that the risk of a break of the main support at 1.1400 has risen.We added that “a break of strong support could trigger a quick sell-off as there is no significant support until 1.1300”.GBP/USD subsequently broke 1.1400 and tumbled to 1.1351 before bouncing.No change in our view for now, although shorter-term oversold conditions could lead to 1-2 days of consolidation first.All in all, downside risk is intact as long as GBP/USD doesn’t move above 1.1540 (the of “strong resistance” was at 1.1590 last Friday).
Source: Fx Street
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