Downward pressure could force GBP/USD to revisit the 1.1850 area in the near term, according to FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “Yesterday, we were of the view that ‘the weakness in GBP could extend to 1.1880 before stabilization is likely’. GBP subsequently dropped to 1.1877 before rebounding. The rebound amidst oversold conditions suggest that the weakness in GBP has stabilized. In other words, GBP is unlikely to weaken further. For today, GBP is more likely to trade between 1.1870 and 1.1980.”

Next 1-3 weeks: “Our update from yesterday (06 Jul, spot at 1.1955) still stands. As highlighted, the boost in downward momentum after the sharp drop on Tuesday is likely to lead to further GBP weakness. The next support is at 1.1850. Overall, only a break of 1.2030 (‘strong resistance’ level was at 1.2075 yesterday) would indicate that the weak phase in GBP that started one week ago has run its course. Looking ahead, the next support below 1.1850 is at 1.1800.”