GBP/USD keeps the bearish stance, eyes 1.3560 – UOB

In opinion of FX Strategists at UOB Group, Cable’s stance remain bearish in the near term and could slip back to the 1.3540 region.

Key Quotes

24-hour view: “The outsized decline in GBP over the past couple of days still appears to have scope to extend further even though any down-move is likely limited to a ‘test’ of the next support at 1.3540. Resistance is at 1.3640 but only a move back above 1.3680 would indicate that the current weakness has stabilized”.

Next 1-3 weeks: “In our latest update last Friday, we expected GBP to “grind lower” to 1.3850. The price action since then is anything but ‘grinding’ as GBP sliced through several strong support levels with ease and plunged to a low of 1.3588 yesterday. The outsized decline appears to be running ahead of itself but with no sign of stabilization just yet, further weakness would not be surprising. That said, it is unlikely that GBP could maintain its current torrid pace of decline. From here, the next level to aim for is at 1.3540. This is a rather strong level and could temporarily check the decline in GBP. A break of this level would open up the way for a move to the year-to-date low at 1.3458. Resistance is at 1.3680 but only a break of the ‘stop-loss’ level at 1.3750 would indicate that a short-term low is in place”.