According to UOB Group currency strategists Lee Sue Ann and Quek Ser Leang, GBP/USD risks falling to the parity zone.
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24 hour view: “Although we expected GBP/USD to weaken further yesterday, we were of the opinion that “1.0300 is probably out of reach for now”. However, GBP/USD did not weaken further as it rebounded strongly to a high of 1.0934 before falling again to close at 1.0690 (-1.50%) The strong downward pressure has eased a bit and GBP/USD is unlikely to retouch yesterday’s low of 1.0327 For today, GBP/USD could continue to trade choppy and probably in a wide range of 1.0600/1.0900.”
Next 1-3 weeks: “Our view from yesterday (Sep 26, GBP/USD at 1.0600) remains valid. As we indicated, in view of the impulsive acceleration to the downside, a further decline in GBP/USD to 1.0000 is not ruled out. That said, the Short-term oversold conditions suggest GBP/USD could trade above yesterday’s low of 1.0327 for a few days To the upside, a break of 1.1000 (no change in yesterday’s “strong resistance” level) would indicate that the GBP/USD weakness from about 2 weeks ago has leveled off.”
Source: Fx Street
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