GBP/USD: Solid support emerges at 1.0840 – UOB

In the opinion of UOB Group’s Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia, GBP/USD risks further decline, although it faces a tough support at 1.0840.

Key Quotes

24-hour view: “GBP soared to a high of 1.1131 before closing on a strong note at 1.1099 (+1.25%). While the rapid rise appears to be running ahead of itself, GBP could test 1.1175 first before the risk of a pullback increases. For today, 1.1260 is unlikely to come into view. Support is at 1.1060, followed by 1.0990.”

Next 1-3 weeks: “The pullback from last week’s high of 1.1493 appears to be corrective in nature. While we do not rule out further declines in GBP, downward momentum is beginning to wane and the support at 10870 is unlikely to be broken. On the upside, a breach of 1.1280 (‘strong resistance’ level) would indicate that GBP is unlikely to weaken further.”