In the view of UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, extra pullbacks could motivate GBP/USD to revisit the 1.1750 zone in the near term.
24-hour view: “After the sharp drop on Tuesday, we highlighted yesterday that ‘While further sharp decline is unlikely, there is room for GBP to weaken to 1.1790 before stabilization is likely’. Our expectations did not materialize as GBP traded mostly sideways, aside from dipping briefly to a low of 1.1805 in NY trade. GBP could continue to trade sideways today, expected to be within a range of 1.1800/1.1865.”
Next 1-3 weeks: “Our update from yesterday (08 Mar, spot at 1.1830) is still valid. As highlighted, while GBP could weaken further, the pace of any further decline is likely to be slower. Support is at 1.1750. The downside risk is intact as long as GBP stays below 1.1950 (no change in ‘strong resistance’ level) in the next couple of days.”
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