GBP/USD should find support at 1.2620 – UOB

In light of the recent proice action, GBP/USD is expected to remain supported in the 1.2620 area, suggested the research team at UOB Group.

Key Quotes

“While we anticipated further GBP weakness, the ease of which the major 1.2795/00 support was taken out was unexpected. The sharp plunge to a low of 1.2720 is extremely over-extended but in view of the sharp decline over the past couple of days, it is too early to expect a sustained recovery. GBP is more likely to consolidate its sharp loss and trade sideways at these lower levels”.

“GBP continues to surprise us as the post-Brexit low of 1.2795/00 was easily taken out. There are no signs that the current bearish phase is about to end soon and further weakness to 1.2620 seems likely, even though the pace of any decline would likely be slower”.