GBP to edge lower to 1.2590 – UOB Group

Scope for the Pound Sterling (GBP) to edge lower to 1.2590; the major support at 1.2565 is likely out of reach. In the longer run, GBP is likely to continue to weaken to 1.2565, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Below 1.2590 GBP to weaken towards 1.2565

24-HOUR VIEW: “Last Friday, we noted that ‘Downward momentum is showing tentative signs of slowing, but there is scope for GBP to retest the 1.2630 level.’ We added, ‘The major support at 1.2615 is unlikely to come under threat.’ The anticipated decline exceeded our expectations, as GBP fell to a low of 1.2598, closing at 1.2619 (-0.39%). Despite the relatively sharp decline, downward momentum has not increased much. That said, there is scope for GBP to edge lower to 1.2590. The major support at 1.2565 is likely out of reach. Resistance is at 1.2640, followed by 1.2670.”

1-3 WEEKS VIEW: “When GBP was at 1.2665 last Friday (15 Nov), we indicated that GBP “is expected to continue to weaken to 1.2615, possibly 1.2565.” We did not anticipate it to reach 1.2615 as quickly, as it dropped to a of low of 1.2598. While downward momentum has not increased much, GBP is likely to continue to weaken to 1.2565. On the upside, a breach of 1.2745 (‘strong resistance’ level was at 1.2770 last Friday) would indicate that the downward pressure that started early last week has faded.”