GBP/USD: To drop to 1.2915 before a possible rebound – UOB Group
|Room for Pound Sterling (GBP) to drop to 1.2915 before the risk of a rebound increases; the next support at 1.2860 is unlikely to come under threat, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.
GBP may drop to 1.2915 in short-term
24-HOUR VIEW: “After GBP soared to 1.3043 on Wednesday and then pulled back, we indicated yesterday (Thursday) that ‘despite the advance, there is no significant increase in upward momentum, and GBP is unlikely to rise much further.’ We expected GBP to trade sideways between 1.2970 and 1.3045. However, instead of trading sideways, GBP dropped sharply, reaching a low of 1.2941. While the decline seems to be running ahead of itself, there is room for GBP to drop to 1.2915 before the risk of a rebound increases. The next support at 1.2860 is unlikely to come under threat. Resistance levels are at 1.2975 and 1.2995.”
1-3 WEEKS VIEW: “We have held a positive view in GBP since 04 Jul when it was trading at 1.2745 (see annotations in the chart below). We have been tracking the advance, and yesterday (18 Jul, spot at 1.3005), we indicated that ‘while the upside risk in GBP remains intact, conditions are severely overbought, and GBP might not reach 1.3100 this time around.’ We added, ‘a breach of 1.2940 would mean that GBP is not rising further.’ In NY trade, GBP fell to a low of 1.2941. While our ‘strong support’ level at 1.2940 has not been clearly breached yet, upward momentum has largely dissipated. In other words, the advance in GBP has come to an end. GBP has likely entered a consolidation phase, and it is likely to trade between 1.2850 and 1.3020 for the time being.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.