The British Pound (GBP) may fall to 1.3385 in the near term before stabilizing, though the major support level at 1.3325 is unlikely to be tested, according to FX strategists Quek Ser Leang and Peter Chia at UOB Group.
Short-Term View: Limited Downside with Potential for Recovery
In the 24-hour outlook, UOB acknowledges that its earlier expectation for a continued rebound in GBP/USD was incorrect. The pair fell sharply to 1.3394 before recovering slightly to close at 1.3422, down 0.47% on the day.
While downward momentum has picked up, it’s not strong enough to expect a deep drop. Analysts see potential for a move lower toward 1.3385, followed by a short-term recovery. Key resistance levels are seen at 1.3445 and 1.3465.
“We do not expect the major support at 1.3325 to come into view,” UOB notes.
1–3 Week Outlook: Downward Bias Emerging, But Limited
In the broader view, UOB had anticipated range-bound trading since late last month. While the pair had been expected to trade between 1.3400 and 1.3525, the recent dip to 1.3394 suggests a tentative buildup in bearish momentum.
That said, analysts remain cautious, stating that it is unclear whether the bearish momentum is strong enough to push GBP/USD down to the key 1.3325 support, which marked last month’s low.
“If GBP breaks above 1.3485 — our ‘strong resistance’ level — it would signal that the current downward bias has faded,” they added.
Summary:
- Near-term downside toward 1.3385 possible.
- Major support at 1.3325 unlikely to be tested.
- Upside break above 1.3485 would negate current bearish pressure.
- Broader trend remains range-bound, but with emerging downside risk.
