GBP/USD: Has a chance to retest the 1.2835 low

The Pound Sterling (GBP) could retest the 1.2835 low; for now, it does not appear to have enough momentum to break below 1.2800. In the longer run, breach of the 1.2900 support suggest GBP could continue to weaken but note that there is a weekly support at 1.2800, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Can fall all the way to the weekly support at 1.2800

24-HOUR VIEW: “Yesterday, we highlighted that GBP could trade in a broad range of 1.2900/1.3040. We did not expect GBP to plunge to a low of 1.2835. GBP rebounded from the low and closed at 1.2880 (-1.24%). While the weakness has not stabilised, downward momentum has slowed to an extent. Today, GBP could retest the 1.2835 low before stabilisation is likely. For now, it does appear to have enough momentum to break the significant support level at 1.2800. Resistance is at 1.2930; a breach of 1.2960 would mean that the weakness has stabilised.”

1-3 WEEKS VIEW: “Our most recent narrative was from two days ago (05 Nov, spot at 1.2955), wherein GBP ‘is likely to trade in a 1.2900/1.3030 range for the time being.’ Yesterday, it broke below the strong support at 1.2900, reaching a low of 1.2835. The breach of the support suggest that GBP could continue to weaken. However, note that 1.2800 is a weekly support level. To maintain the rapid buildup in momentum, GBP must remain below 1.3000.”

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