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GBP/USD: The next step down is 1.1580 – UOB

In the opinion of the currency strategists of UOB Group, Lee Sue Ann and Quek Ser Leang, the GBP/USD it is still at risk of a deeper setback in the short term.

24 hour outlook: “Our expectations that the pound would trade sideways yesterday were wrong as it tumbled to a low of 1.1622 during the New York session. Although the rapid decline appears to have been overdone, the pound’s weakness has not stabilized. In other words, cross could weaken further but chance of breaking 1.1610 is not high for now. The next support at 1.1580 is not expected to be threatened. Resistance is at 1.1688, but only a break of $1.1715 would indicate that the pound’s weakness has stabilized.”

Next 1-3 weeks: “On Monday (Aug 29, pair at 1.1690), we note that downside momentum has rapidly improved and held the view that the pound could weaken towards 1.1630. Yesterday (Aug 30), GBP fell to a low from 1.1622.The bearish momentum has continued to improve, although not by much, and the risk for the pair remains to the downside. The next level to watch is at 1.1580. To the upside, a break of 1.1755 (‘strong resistance’ level was 1.1800 yesterday) would indicate that the pound is unlikely to weaken further.”

Source: Fx Street

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