In opinion of FX Strategists at UOB Group Quek Ser Leang and Lee Sue Ann, GBP/USD could extend the downtrend further on a close below 1.2940.

Key Quotes

24-hour view: “We expected GBP to weaken yesterday but we were of the view that ‘any weakness is not expected to challenge last week’s low near 1.2975’. GBP subsequently dropped to 1.3005 before settling at 1.3011 (-0.36%). Downward momentum is beginning to build and GBP could break the 1.2975 level today. That said, a sustained decline below this level appears unlikely (the next support at 1.2940 is not expected to come into the picture). Resistance is at 1.3030 followed by 1.3055.”

Next 1-3 weeks: “Our latest narrative was from yesterday (18 Apr, spot at 1.3060) where GBP is likely to trade between 1.2975 and 1.3150. Shorter-term downward momentum is beginning to build and GBP could dip below 1.2975. However, GBP has to break the next support at 1.2940 before a sustained decline is likely. On the upside, a break of 1.3075 (‘strong resistance’ level) would indicate that the build-up in momentum has fizzled out.”