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The downward momentum in GBP/USD has improved in past sessions, noted FX Strategists at UOB Group.

Key Quotes

24-hoour view: “Our expectation for GBP to ‘consolidate and trade between 1.4080 and 1.4140’ yesterday was incorrect as it plummeted to 1.4035 before snapping back up. While the outlook is mixed after the rapid swings, the underlying tone appears to be weak. From here, barring a break of 1.4125 (minor resistance is at 1.4100), there is scope for GBP to retest the 1.4035 support. The next support at 1.4000 is unlikely to come into the picture.”

Next 1-3 weeks: “Two days ago (14 Jun, spot at 1.4115), we highlighted that shorter-term momentum has improved but GBP ‘has to close below 1.4080 before a move to 1.4050 can be expected’. We did not anticipate the sudden sharp drop in GBP yesterday and the subsequent strong rebound from a low of 1.4035. While GBP closed at 1.4085, downward momentum has improved further and the risk has shifted to the downside. However, the next major support at 1.4005 may not come into the picture so soon. On the upside, a break of 1.4150 would indicate that GBP is not ready to move to 1.4005.”