UOB Group FX analysts Quek Ser Leang and Peter Chia indicate that recent momentum suggests continued weakness for the Pound Sterling (GBP). They observe that the major support level at 1.2780 is not likely to be tested immediately.
24-Hour View:
Yesterday, GBP was noted to be under “mild downward pressure.” Analysts anticipated a gradual decline but expected it to stabilize above 1.2850. However, GBP fell more sharply than anticipated, hitting a low of 1.2850 during late New York trading. The current momentum indicates potential further weakness in GBP. Despite this, the major support level at 1.2780 is unlikely to be reached today; an alternative support level at 1.2820 may come into play. To maintain the downward momentum, GBP needs to stay below 1.2895, with minor resistance at 1.2875.
1-3 Weeks View:
Earlier observations from last Friday (July 19) suggested that GBP was in a consolidation phase, expected to trade between 1.2850 and 1.3020. The recent drop to 1.2850 tests the lower bound of this range. While downward momentum is increasing, it is too early to predict a substantial decline. As long as GBP does not breach the strong resistance level at 1.2920, it is expected to exhibit a downward bias towards the major support level at 1.2780.
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