While further retracements in GBP/USD appear on the cards in the near term, there is a strong support around the 1.2545 level, according to UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.
Key Quotes
24-Hour View: Our view for GBP to weaken further was wrong, as it touched a high of 1.2638 before settling at 1.2629 (+0.31%). Despite the progress, there is no significant increase in momentum, and the GBP is unlikely to rise further. Today, GBP is more likely to trade in the 1.2595/1.2655 range.
Next 1-3 weeks: We maintain the same view as yesterday (04 Sep, spot at 1.2590). As highlighted, the risk for GBP appears to have shifted to the downside. However, as downward momentum is only beginning to build, any weakness is likely to face solid support at 1.2500 (there is another strong support at 1.2545). Resistance-wise, if GBP breaks above 1.2680, it would mean that the momentum buildup has faded
