FX Strategists at UOB Group noted the pair could re-test the 1.3510 area in the very near term.
Key Quotes
24-hour view: “As expected, GBP traded sideways yesterday albeit at a much narrower range than anticipated. From here, the undertone has weakened somewhat and this could lead to a probe of the 1.3510 support (next support is at 1.3480). At this stage, a clear break below this level would come as a surprise. Resistance is at 1.3585 followed by 1.3610″.
Next 1-3 weeks: “We have held the same view since 04 May (spot at 1.3570) that while the outlook for GBP is still deemed as bearish, the odds for further weakness to the year-to-date low of 1.3458 are not high. Since then, GBP traded mostly sideways before dipping to a low of 1.3460 last Thursday (10 May). The subsequent rapid bounce from the low continues to suggest that the prospect for further GBP decline is not high. However, only a break of 1.3630 (‘stop-loss’ unchanged) would indicate that the current bearish phase has ended. Until then, another attempt to 1.3455/60 is not ruled but based on the current lackluster momentum, we continue to have doubts that GBP can break below this level convincingly”.
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