Scope for the Pound Sterling (GBP) to retest the 1.2630 level; the major support at 1.2615 is unlikely to come under threat. In the longer run, GBP is expected to continue to weaken to 1.2615, possibly 1.2565, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.
GBP is expected to continue to weaken to 1.2615
24-HOUR VIEW: “When GBP was at 1.2710 yesterday, we highlighted the following: ‘Although the weakness has not stabilised, downward momentum has slowed a tad. This, combined with oversold conditions, suggests 1.2665 may still be out of reach for now.’ While our view of a weaker GBP was correct, the lurch lower that sent it to a low of 1.2630 was unexpected. Downward momentum is showing tentative signs of slowing, but there is scope for GBP to retest the 1.2630 level before stabilisation is likely. The major support at 1.2615 is unlikely to come under threat. Resistance is at 1.2690; a breach of 1.2715 would mean that GBP is not weakening further.”
1-3 WEEKS VIEW: “In our latest narrative from two days ago (13 Nov, spot at 1.2735), we indicated that ‘Downward momentum has surged, and the next technical target is at 1.2665.’ Yesterday, GBP fell and exceeded the target, dropping to a low of 1.2630. We continue to expect GBP to weaken, eying a move to 1.2615, possibly 1.2565. We will maintain our view provided that 1.2770 (‘strong resistance’ level was at 1.2845 yesterday) is not breached.”
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