In the opinion of the currency strategists of the UOB Group, further decline in GBP/USD should find strong support in the 1.3160 region in the short term.
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24 hour view: “Although we expected GBP/USD to weaken last Friday, we are of the opinion that ‘important support at 1.3250 is unlikely to be threatened’. Subsequent weakness exceeded our expectations by a wide margin as GBP/USD tumbled 0.88% (NY close 1.3227) Further weakness not ruled out but oversold conditions suggest any decline is expected to find solid support at 1.3160 (2021 low) Resistance is at 1.3255, followed by 1.3280.”
Next 1-3 weeks: “Over a week ago (Feb 25, GBP/USD at 1.3380), we highlighted that GBP/USD could weaken further, but there is important support at 1.3250. Subsequently, GBP/USD moved mainly sideways and In our latest narrative from last Friday (March 4, GBP/USD at 1.3330), we noted that ‘downside momentum still looks lackluster, but there is still a chance GBP/USD declines to 1.3250’. GBP/USD broke 1.3250 as it fell to a low of 1.3202.Momentum to the downside has improved and risk remains to the downside.That being said, there is another major support at 1.3160.On the upside, a break of the ‘ strong resistance’ at 1.3330 (the level was at 1.3420 last Friday) would indicate that the downside risk has dissipated. Looking ahead, the next support below 1.3160 is 1.3100.”
Source: Fx Street
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