GBP/USD: Set to retest the 1.3050 level before a more sustained rebound – UOB Group

The Pound Sterling (GBP) could retest the 1.3050 level before a more sustained rebound is likely. In the longer run, GBP is expected to weaken further; the next level to watch is 1.3000, UOB Group FX analysts Quek Ser Leang and Peter Chia note.

May target 1.3000 below 1.3050

24-HOUR VIEW: “We indicated yesterday that GBP ‘is likely to continue to weaken, potentially to 1.3035.’ However, GBP fell less than expected to 1.3049, rebounding to close largely unchanged (1.3080, +0.05%). While downward momentum is beginning to slow, GBP could retest the 1.3050 level before a more sustained rebound is likely. The major support at 1.3000 is unlikely to come under threat. Resistance is at 1.3105, followed by 1.3120.”

1-3 WEEKS VIEW: “We highlighted two days ago (09 Sep, spot at 1.3130) that GBP ‘could drift lower, possibly reaching 1.3050.’ Yesterday (10 Sep, spot at 1.3070), we highlighted that GBP ‘is expected to weaken further and the next level to watch is 1.3000.’ In NY trade, GBP fell to a low of 1.3049. From here, as long as 1.3140 (no change in ‘strong resistance’ level from yesterday) is not breached, we will continue to hold the same view.”