GBP/USD: Downward momentum picks up pace – UOB

In opinion of FX Strategists at UOB Group, GBP/USD remains focused on a potential breach of 1.4080 – UOB

Key Quotes

24-hour view: “We highlighted yesterday that GBP ‘could dip below 1.4080 but the next support at 1.4050 is not expected to come into the picture’. In line with our expectation, GBP dropped to 1.4069 before rebounding to end the day little changed at 1.4105 (-0.06%). Downward pressure has eased and GBP is unlikely to weaken further. For today, GBP is more likely to consolidate and trade between 1.4080 and 1.4140.”

Next 1-3 weeks: “Our update from yesterday (14 Jun, spot at 1.4115) still stands. As highlighted, shorter-term momentum has improved but GBP has to close below 1.4080 before a move to 1.4050 can be expected. At this stage, the prospect for GBP to close below 1.4080 is not high but it would increase as long as GBP does not move above 1.4185 (‘strong resistance’ level) within these few days.”