A move above 1.1940 could prompt the selling bias in GBP/USD to subside in the next weeks, suggested FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “Last Friday, we expected GBP to ‘trade between 1.1750 and 1.1885’. GBP subsequently traded within a narrower range than expected (1.1805/1.1872). The underlying tone has improved somewhat and GBP is likely to edge higher from here. However, any advance is unlikely to threaten the strong resistance at 1.1940 (there is another resistance at 1.1910). Support is at 1.1850 followed by 1.1815.”

Next 1-3 weeks: “We turned negative GBP early last week. After GBP dropped to 1.1761 and rebounded, we highlighted last Friday (15 Jul, spot at 1.1830) that GBP could continue to weaken but the next major support at 1.1700 may not come into the picture so soon. GBP subsequently rebounded and downward momentum is beginning to wane. That said, only a break of 1.1940 (no change in ‘strong resistance’ level from last Friday) would indicate that the risk for further GBP weakness has dissipated.”