Pound Sterling (GBP) may ease to 1.3375 in opposition to US Greenback (USD); any additional decline is unlikely to succeed in the main help at 1.3335. Within the longer run, downward momentum is starting to construct; it might take some time earlier than 1.3335 comes into view, UOB Group’s FX analysts Quek Ser Leang and Peter Chia notice.
Downward momentum is starting to construct
24-HOUR VIEW: “GBP prolonged its sharp drop from two days in the past, reaching a low of 1.3401 within the NY session, earlier than closing marginally decrease at 1.3422 (-0.04%). Whereas downward momentum has not elevated considerably, there’s a likelihood for GBP to ease additional to 1.3375. A dip beneath this stage isn’t dominated out, however based mostly on the present momentum, any additional decline is unlikely to succeed in the main help at 1.3335. Resistance is at 1.3440; a breach of 1.3470 would point out that the present gentle downward strain has eased.”
1-3 WEEKS VIEW: “In our newest narrative from final Friday (13 Jun, spot at 1.3600), we highlighted that ‘upward momentum is growing, however we choose to attend for a decisive shut above 1.3640 earlier than revising our GBP outlook to constructive.’ We added, ‘the chance of GBP closing above 1.3640 will stay intact so long as 1.3515 isn’t breached.’ GBP fell sharply on Tuesday and broke beneath 1.3515. Though the momentum buildup signifies that GBP may weaken additional, on condition that downward momentum is just starting to construct, it might take some time earlier than 1.3335 comes into view. On the upside, ought to GBP break above 1.3520, it might point out that GBP is extra prone to commerce in a spread as an alternative of heading decrease towards 1.3335.”
