GBP/USD: Next support now appears at 1.1850 – UOB

Further downside in GBP/USD is expected to meet the next support at 1.1850, suggested FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “We expected GBP to ‘consolidate and trade between 1.2080 and 1.2175’ yesterday. We did not expect the sharp sell-off as GBP plunged to 1.1899 before rebounding. While downward momentum has waned somewhat, the weakness in GBP could extend to 1.1880 before stabilization is likely. Resistance is at 1.1990 followed by 1.2020.”

Next 1-3 weeks: “We turned negative GBP in the middle of last week. After GBP dropped to 1.1976 and rebounded, we highlighted yesterday (05 Jul, spot at 1.2115) that downward momentum has waned and the chance for GBP to move below 1.1976 is not high. We did not expect the subsequent sudden and rapid downward acceleration as GBP plunged to 1.1899 during NY session before closing at 1.1959 (-1.19%). The boost in downward momentum is likely to lead to further GBP weakness. The next support is at 1.1850. On the upside, a break of 1.2075 (‘strong resistance’ level was at a much higher level of 1.2205 yesterday) would indicate that the weak phase has come to an end.”