GBP/USD further downside likely – UOB

FX Strategists at UOB Group remain negative on Cable, expecting further retracements in the near term.

Key Quotes

“In line with expectation, GBP extended its down-move but the decline did not have enough momentum to threaten the major 1.2345/50 support (low of 1.2375). Despite the patchy momentum, the undertone is still weak and a move below 1.2345/50 is not ruled out (even though a sustained break below this level seems unlikely). Next support is at 1.2300”.

“GBP hit low of 1.2363 at the time of writing, just above the major 1.2345/50 support. While downward momentum is not exactly impulsive, the current weak undertone is still intact and a break of 1.2345/50 could lead to further extension to 1.2255/60 (with minor support at 1.2300). Only a move back above 1.2470 would indicate that the immediate downward pressure has eased”.