GBP/USD: Still room for further retracement – UOB

FX Strategists at UOB Group suggested GBP/USD still risks further pullbacks in the next weeks.

Key Quotes

24-hour view: “Yesterday, we held the view that GBP ‘could continue to trade in a choppy manner within a range of 1.3240/1.3355’. GBP subsequently traded between 1.3263 and 1.3352. The underlying tone appears to have weakened somewhat and GBP could dip to 1.3240 before the risk of a rebound would increase. The major support at 1.3195 is not expected to come under threat. Resistance is at 1.3310 followed by 1.3340.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (01 Dec, spot at 1.3295). We continue to hold the same view that while further GBP weakness is not ruled out, 1.3195 is a solid support and may not be easy to crack. On the upside, a break of 1.3390 (no change in ‘strong resistance’ level from yesterday) would indicate that the weakness in GBP from early last week has run its course.”

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