Current price movements are likely part of a range-trading phase, probably between 1.2740 and 1.2860. In the longer run, Pound Sterling (GBP) could decline further vs US Dollar (USD); it is unclear if it can reach the next major support at 1.2580, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
GBP to decline further against USD
24-HOUR VIEW: “Yesterday, we indicated that GBP ‘could edge lower to 1.2675 before stabilisation is likely.’ We also indicated that ‘any further decline is unlikely to reach 1.2580.’ Our expectations did not materialise as GBP traded between 1.2725 and 1.2812 before closing higher by 0.33% at 1.2766. The current price movements are likely part of a range-trading phase, probably between 1.2740 and 1.2860.”
1-3 WEEKS VIEW: “There is not much to add to our update from yesterday, 08 Apr, when GBP was at 1.2760. As highlighted, the dramatic plunge in GBP late last week and early this week appears excessive. As there is no sign of stabilisation just yet, GBP ‘could decline further, but it is unclear if it can reach the next major support at 1.2580.’ On the upside, a breach of 1.2950 (‘strong resistance’ level was at 1.3000 yesterday) would suggest that GBP is not declining further.”
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