GBP/USD: Sharp drop in GBP has scope to extend – UOB Group

Sharp drop in GBP has scope to extend; the 1.2245 level is expected to provide support. In the longer run, GBP is likely to trade with a downward bias towards 1.2245, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

GBP is likely to trade with a downward bias

24-HOUR VIEW: “While the sharp drop in GBP today has scope to extend, we expect the 1.2245 level to provide support. The next support, at 1.2200, is unlikely to come into view. Resistance is at 1.2355. To sustain the rapid buildup in momentum, GBP must remain below 1.2395.”

1-3 WEEKS VIEW: “Despite dropping sharply upon opening today, there has been no significant increase in downward momentum. However, GBP is likely to trade with a downward bias towards 1.2245. Further decline below 1.2245 is not ruled out, but currently, GBP does not appear to have enough momentum to reach 1.2200. The downward bias will remain intact as long as 1.2435 is not breached.”