Lee Sue Ann, economist at UOB Group, and Quek Ser Leang, a market strategist, suggest that the GBP/USD it still faces further decline in the near term.
24 hour perspective: “Yesterday, when the Pound was trading at 1.2370, we expected it to fall below 1.2350. However, we indicated that the next major support at 1.2300 was unlikely to appear today. Our expectations were correct, as GBP/USD broke below from 1.2350 and fell to a low of 1.2308.Although conditions are heavily oversold, the weakness in the pair has yet to stabilize.Today, As long as the British Pound remains below 1.2375 (minor resistance is at 1.2345), it is likely to break below 1.2300. The probability of reaching the next support at 1.2255 today is not high.”
Next 1-3 weeks: “Yesterday we indicated that the risk to the Pound remained low. We added that a clear break below 1.2350 would shift the focus to 1.2300. In line with our expectations, GBP/USD broke 1.2350 and fell to 1.2308. The phase sterling weakness started two weeks ago remains intact Given oversold conditions any further pullback is likely to come at a slower pace and it remains to be seen if the next major support at 1.2175 will show up this time It should be noted that there is shorter-term support at 1.2250. To the upside, breaking above 1.2415 (‘strong resistance’ level was at 1.2470 yesterday) would suggest that the pair’s weakness has stabilized.”
Source: Fx Street
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