British Pound: Risk of test of 1.3140 against US Dollar – UOB

UOB’s Quek Ser Leang and Lee Sue Ann report that GBP/USD extended its sharp decline to 1.3205, leaving conditions deeply oversold but with the bias still pointing lower. They see scope for a test of the June low at 1.3140 before stabilisation, while resistance at 1.3245 and 1.3295 marks levels that would signal downside risks fading.

Pound remains pressured versus Dollar

"24-HOUR VIEW: GBP extended its sharp decline from Wednesday, dropping to a low of 1.3205 before closing 0.16% lower at 1.3219. Unsurprisingly, conditions are deeply oversold due to the sharp decline. However, the bias for GBP remains on the downside, even though any decline is likely to stay within a 1.3190/1.3245 range."

"1-3 WEEKS VIEW: In our last update from two days ago (23 Sep, spot at 1.3345), we stated that “it is unclear for now whether GBP could break below 1.3300.” We did not expect GBP to easily break 1.3300 and plunge, reaching a low of 1.3205 yesterday. While the weakness in GBP that started two weeks ago appears to be overextended, there is a chance for GBP to test the June low of 1.3140 before stabilisation is likely. On the upside, a breach of 1.3295 (‘strong resistance’ level previously at 1.3390) would indicate that 1.3140 is out of reach."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)