GBP/USD remains under pressure and further downside could retest 1.2140 ahead of 1.2100, suggested FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “We highlighted yesterday that ‘momentum is building quickly and a break of 1.2200 would not be surprising’. We added, ‘the next support at 1.2140 is likely out of reach for now’. Our view turned out to be correct as GBP dropped to 1.2165 before rebounding. While downward pressure appears to have eased, GBP could dip below 1.2165. However, 1.2140 still appears to be out of reach for now. Resistance is at 1.2240 followed by 1.2270.”

Next 1-3 weeks: “Yesterday (12 May, spot at 1.2240), we highlighted that improved downward momentum suggests that GBP could break 1.2200. We added, ‘the next support is at 1.2140’. GBP subsequently cracked 1.2200 and dropped to 1.2165. Further weakness appears likely even though oversold shorter-term conditions could slow the pace the any further decline. The next support below 1.2140 is at 1.2100. On the upside, a breach of 1.2300 (‘strong resistance’ level was at 1.2380 yesterday) would indicate that the weakness that started late last week has run its course.”