Bets for further GBP decline are dwindling – UOB

The research team at UOB Group sees further downside in GBP/USD as likely to be limited in the next weeks, although the pair’s outlook remains bearish.

Key Quotes

“The major 1.3060 resistance remains intact as GBP dropped sharply during NY hours to a low of 1.2955. The decline appears to have scope to extend lower but last week’s 1.2915 low is a rather strong support and a clear break below this level seems unlikely. Resistance is at 1.3000 but only a move back above 1.3030 would indicate that the immediate downward pressure has eased”.

“After coming to within one pip of our stop-loss at 1.3060 (high of 1.3059 yesterday), GBP dropped sharply to current level of 1.2965. While the bearish phase is still intact, downward momentum has been dented and the odds for further weakness to 1.2865 are not very high (1.2915 is already a strong short-term support). Stop-loss remains at 1.3060 for now”.