There may be room for Pound Sterling (GBP) to weaken additional towards US Greenback (USD); any decline is probably going a part of a decrease vary of 1.3360/1.3445. Within the longer run, c; the subsequent technical goal at 1.3320 could not come into sight so quickly, because it may consolidate first, UOB Group’s FX analysts Quek Ser Leang and Peter Chia be aware.
GBP view remains to be unfavorable
24-HOUR VIEW: “We had anticipated GBP to weaken on Monday. After GBP fell, we highlighted the next yesterday: ‘The anticipated decline exceeded our expectation, as GBP dropped to a low of 1.3425. Whereas additional GBP weak spot will not be dominated out, circumstances stay oversold, and any declines are unlikely to achieve the foremost help at 1.3375. To maintain the oversold momentum, GBP should maintain under 1.3475.’ Our evaluation was appropriate, as after rising briefly to a excessive of 1.3464 within the NY commerce, GBP then dropped to a low of 1.3379. Whereas circumstances stay oversold, there’s room for GBP to weaken additional. That mentioned, any decline is probably going a part of a decrease vary of 1.3360/1.3445. In different phrases, GBP is unlikely to interrupt clearly under 1.3360 or above 1.3445.”
1-3 WEEKS VIEW: “We turned unfavorable on GBP early this month (see annotations within the chart under). Monitoring the next actions, we indicated yesterday (15 Jul, spot at 1.3425) that ‘the outlook for GBP stays unfavorable, and we now anticipate a transfer to 1.3375.’ GBP then dropped to a low of 1.3379. We keep our unfavorable GBP view, although the subsequent technical goal at 1.3320 could not come into sight so quickly – short-term oversold circumstances may result in consolidation first. On the upside, ought to GBP break above 1.3500 (‘robust resistance’ was at 1.3520 yesterday), it might imply that the weak spot in GBP has stabilised.”
