Downward momentum has slowed somewhat, but there is still a chance for Pound Sterling (GBP) to decline to 1.3200, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Chance for GBP might decline to 1.3200
24-HOUR VIEW: “While we held the view that GBP ‘could rebound further’ yesterday, we indicated that ‘any advance is likely part of a 1.3290/1.3390 range.’ Our view did not materialise, as GBP traded sideways between 1.3315 and 1.3366, closing marginally higher by 0.02% at 1.3336. Despite the relatively quiet price movements, there has been a slight increase in downward momentum. Today, GBP may edge lower, but any decline is likely part of a lower range of 1.3295/1.3350. To put it another way, GBP does not appear to have enough momentum to break below 1.3295.”
1-3 WEEKS VIEW: “Our update from yesterday (13 Oct, spot at 1.3350) remains valid. As highlighted, while downward momentum has slowed with the recent recovery, “there is still a chance for GBP to decline to 1.3200.” Overall, only a breach of 1.3390 (‘strong resistance’ level was at 1.3410 yesterday) would suggest that the weakness in GBP that started in the middle of last week has stabilised.”