Downward momentum continues to increase, and there is a chance for Pound Sterling (GBP) to drop to 1.3460. In the longer run, GBP is now neutral; it is likely to trade in a range between 1.3415 and 1.3585, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Downward momentum continues to increase
24-HOUR VIEW: “After GBP dropped to a low of 1.3502 on Monday, we indicated yesterday, Tuesday, that ‘the rapidly increasing downward momentum suggests GBP could continue to decline today, potentially dropping below the strong support at 1.3485.’ We also indicated that ‘currently, GBP does not appear to have enough momentum to reach 1.3415.’ Our assessments were not wrong, as GBP fell to a low of 1.3479. Downward momentum continues to increase, and today, there is a chance for GBP to drop to 1.3460. At this time, GBP still does not appear to have enough momentum to reach 1.3415. Resistance is at 1.3515, followed by 1.3530.”
1-3 WEEKS VIEW: “Yesterday (19 Aug, spot at 1.3505), we highlighted that GBP ‘is neutral now,’ and we were of the view that it ‘is likely to trade in a range between 1.3415 and 1.3585.’ Our view remains unchanged.”
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