GBP/USD risks a deeper pullback to 1.3050 – UOB

The door remains open for GBP/USD to extend the downside to the 1.3050 region, suggested FX Strategists at UOB Group Quek Ser Leang and Peter Chia.

Key Quotes

24-hour view: “Our expectations for GBP to ‘trade sideways within a range of 1.3085/1.3145’ were incorrect as it popped to 1.3167 before plummeting to a low of 1.3068 during NY session. Downward momentum is beginning to build and GBP could drop below 1.3050. For today, the major support at 1.3000 is likely out reach. Resistance is at 1.3090 followed by 1.3110.”

Next 1-3 weeks: “We have held the same view since last Thursday (31 Mar, spot at 1.3140) where GBP ‘is likely to trade between 1.3050 and 1.3250’. After trading sideways for a few days, GBP dropped to 1.3068 during NY session and shorter-term downward momentum is beginning to build. A breach of 1.3050 would not be surprising but it is left to be seen if GBP could crack the major support at 1.3000. Overall, GBP is likely to trade with a downward bias towards 1.3000. On the upside, a breach of 1.3135 (‘strong resistance’ level) would indicate that GBP is not ready to head lower.”