The Pound Sterling (GBP) is projected to weaken further, with potential support levels anticipated around 1.3035. According to UOB Group FX strategists Quek Ser Leang and Peter Chia, the significant support level at 1.3000 is expected to remain intact for now.
Short-Term Outlook: Following yesterday’s observation at 1.3130, where a slight increase in downward momentum was noted, the GBP has indeed experienced a decline, reaching a low of 1.3068. Despite the drop exceeding initial expectations, the momentum for further weakening persists. For today, the GBP is expected to continue its descent towards 1.3035, though the major support level at 1.3000 is likely to hold. To maintain the downward pressure, GBP needs to stay below 1.3115, with minor resistance at 1.3090.
Medium-Term Perspective: As of September 9, with the GBP trading at 1.3130, there was an indication of increased downward momentum, suggesting a potential drift towards 1.3050, provided that the resistance level at 1.3250 remains unbreached. The GBP has dropped more rapidly than anticipated, reaching 1.3068 during New York trading hours. Moving forward, the focus will be on whether the GBP can hold above the 1.3000 mark, with the outlook remaining bearish unless the resistance level at 1.3140 is surpassed.
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