British Pound: Limited downside inside tight corridor against US Dollar – UOB

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note GBP/USD has extended its recent pullback but closed almost unchanged around 1.3595. Oversold conditions and slowing momentum suggest further immediate downside is limited, with intraday trade expected between 1.3570 and 1.3620. Over the next one to three weeks, they see only modest downside, likely contained within a 1.3550–1.3645 range.

Oversold Pound seen holding defined band

"24-HOUR VIEW: GBP extended its sharp decline from two days ago, falling to a low of 1.3571 yesterday. GBP closed little changed at 1.3594 (-0.03%). Oversold conditions, combined with slowing momentum suggest that instead of continuing to decline today, GBP is more likely to trade in a range of 1.3570/1.3620."

"1-3 WEEKS VIEW: We turned positive on GBP last Monday (17 Aug, spot at 1.3540). On Friday (21 Aug, spot at 1.3640), we indicated that GBP “could continue to rise to 1.3700.” Two days ago, GBP fell and broke below our ‘strong support’ level at 1.3605, invalidating our view. There has been a slight increase in downward momentum, and GBP could edge lower. However, based on the prevailing momentum, any decline could be contained within a 1.3550/1.3645 range."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)