Pound Sterling (GBP) might check the numerous help at 1.3445 towards US Greenback (USD); oversold situations recommend a transparent break beneath this degree is unlikely. Within the longer run, outlook for GBP stays detrimental; the subsequent technical goal is at 1.3445, UOB Group’s FX analysts Quek Ser Leang and Peter Chia notice.
Outlook for GBP stays detrimental
24-HOUR VIEW: “GBP dropped to a low of 1.3535 final Thursday after which rapidly rebounded. On Friday, we indicated that GBP ‘might retest the 1.3535 degree.’ Nonetheless, we acknowledged that ‘the present momentum appears to recommend the foremost help at 1.3510 is unlikely to return beneath risk.’ Though our directional name turned out to be appropriate, the next decline exceeded our expectations, as GBP plunged via 1.3510 and reached a low of 1.3481. Not surprisingly, the sharp drop has led to a rise in downward momentum. Immediately, GBP might check the numerous help degree at 1.3445. On condition that situations are deeply oversold, a transparent break beneath this degree is unlikely. To maintain the oversold momentum, GBP should not break above 1.3540 (with minor resistance is at 1.3520).”
1-3 WEEKS VIEW: “We have now seen GBP negatively since early this month. Monitoring the next worth actions, in our most up-to-date narrative from final Wednesday (09 Jul, spot at 1.3590), we acknowledged that ‘the probability of GBP dropping to 1.3510 is rising.’ On Friday, GBP broke beneath 1.3510 and reached a low of 1.3484. The outlook for GBP stays detrimental, and the subsequent technical goal is at 1.3445. We are going to preserve our view supplied that the ‘robust resistance’ at 1.3575 (degree was at 1.3645 final Friday) just isn’t breached. Wanting forward, if GBP had been to interrupt and maintain beneath 1.3445, it could set off a deeper decline in direction of June’s low, close to 1.3375.”
