May not reach 1.3000 – UOB Group

Price action suggests further Pound Sterling (GBP) weakness; the next major support at 1.3000 may not come into view so soon, UOB Group FX analysts Quek Ser Leang and Peter Chia note.  

Downside risk remains intact below 1.3220

24-HOUR VIEW: “After GBP fell sharply last Thursday, we indicated on Friday that “the weakness has not stabilised.” We also indicated that GBP “could dip to 1.3080 before stabilisation can be expected.” In NY trade, GBP dropped to 1.3070, rebounding quickly to end the day largely unchanged at 1.3123 (-0.03%). The price action is likely part of a sideways trading phase. Today, we expect GBP to trade in a 1.3080/1.3180 range.”

1-3 WEEKS VIEW: “Our update from last Friday (04 Oct, spot at 1.3130) remains valid. As highlighted, although the recent price action suggests further GBP weakness, short-term conditions are severely oversold, and the next major support at 1.3000 may not come into so soon. The downside risk will remain intact provided that GBP does not break above 1.3220 (‘strong resistance’ level was at 1.3255 last Friday).”