British Pound: Downside pressure persists against US Dollar - UOB
UOB’s Quek Ser Leang notes GBP/USD rebounded from 1.3479 to close at 1.3535 after an overdone drop, with intraday price action expected to consolidate between 1.3485 and 1.3540. On a 1–3 week view, a close below 1.3495 would likely trigger a break of 1.3475, while resistance at 1.3560 caps the upside. The broader pullback has scope to extend toward 1.3410.
Range trade but watch key supports
"24-HOUR VIEW: GBP fell sharply to a low of 1.3493 last Thursday. On Friday, we indicated that “the sharp drop appears to be overdone, and instead of continuing to decline, GBP is more likely to consolidate between1.3495 and 1.3535.” The subsequent price movements did not unfold as expected. GBP fell briefly to 1.3479 before snapping back up to a high of 1.3535. Given that the brief decline did not result in any increase in downward momentum, we continue to expect GBP to consolidate today, most likely between 1.3485 and 1.3540."
"1-3 WEEKS VIEW: Last Friday (11 Sep, spot at 1.3515), we highlighted that “downward momentum is starting to build, and if GBP closes below 1.3495, it will then likely break the next support at 1.3475 as well.” GBP subsequently dropped to a low of 1.3479 before rebounding to close 0.19% higher at 1.3535. There has been no further increase in downward momentum, but our view remains unchanged as long as GBP holds below 1.3560 (no change in ‘strong resistance’ level)."
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