GBP/USD remains weak and looks to 1.3370 – UOB

According to FX Strategists at UOB Group, Cable could retreat to the 1.3370 level and below in the next weeks.

Key Quotes

24-hour view: “While we expected GBP to ‘weaken further’ yesterday, we were of the view that ‘the major support at 1.3480 is unlikely to come into the picture’. The subsequent weakness exceeded our expectations by a wide margin as GBP plunged to 1.3412. Further weakness is not ruled out but deeply oversold conditions indicate that the pace of any decline is likely to be slower. The next support is at 1.3370 (minor support is at 1.3400). Resistance is at 1.3480 followed by 1.3520.”

Next 1-3 weeks: “Yesterday (29 Sep, spot at 1.3540), we highlighted that GBP ‘is likely to weaken further to 1.3480’. We added, ‘a clear break of 1.3480 could potentially lead to further rapid decline (next support is at 1.3370)’. GBP subsequently cracked 1.3480 and plunged to 1.3412. The focus is at 1.3370 now. A break of this level would shift the focus to 1.3300. The current negative outlook is deemed intact as long as GBP does not move above 1.3570 (‘strong resistance’ level was at 1.3650 yesterday).”