While further retracements in GBP/USD appear on the cards in the near term, there is a strong support around the 1.2545 level, according to UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.
Key Quotes
24-hour view: Our view for GBP to weaken further was incorrect, as it rose to a high of 1.2638 before settling at 1.2629 (+0.31%). Despite the advance, there is no significant increase in momentum, and GBP is unlikely to rise much further. Today, GBP is more likely to trade in a range of 1.2595/1.2655.
Next 1-3 weeks: We maintain the same view as yesterday (04 Sep, spot at 1.2590). As highlighted, the risk for GBP appears to have shifted to the downside. However, as downward momentum is only beginning to build, any weakness is likely to face solid support at 1.2500 (there is another strong support at 1.2545). Resistance-wise, if GBP breaks above 1.2680, it would mean that the momentum buildup has faded
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