GBP/USD risks extra losses below 1.3735 – UOB

In opinion of FX Strategists at UOB Group, Cable’s downtrend could pick up pace if 1.3735 is cleared in the near term.

Key Quotes

24-hour view: “We highlighted yesterday ‘the rapid drop appears to be overdone but with no signs of stabilization just yet, GBP could test 1.3760 first before a recovery can be expected’. Our view was not wrong as GBP dipped to 1.3758 before rebounding quickly. Downward pressure has eased and the downside risk has more or less dissipated. For today, GBP is expected to trade sideways within a 1.3760/1.3850 range.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (07 Jul, spot 1.3800). As highlighted, downward momentum is beginning to build but GBP has to close below 1.3735 before a sustained decline can be expected. The prospect for GBP to close below 1.3735 is not high for now but it would remain intact unless GBP moves above the ‘strong resistance’ level at 1.3880 within these few days.”