The breach of 1.1580 could motivate GBP/USD to revisit the 1.1530 region in the short term, suggest FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “We highlighted yesterday that GBP ‘could weaken further but the chance for a break of 1.1610 is not high for now’. The anticipated weakness exceeded our expectations as GBP dropped to 1.1599 before closing on a soft note at 1.1622 (-0.27%). While downward momentum has not improved by much, GBP is still weak. For today, GBP could dip below 1.1580 but the next support at 1.1530 is likely out of reach. Resistance is at 1.1635 followed by 1.1665. A break of 1.1665 would indicate that the weakness in GBP has stabilized.”

Next 1-3 weeks: “Yesterday (31 Aug, spot at 1.1655), we indicated that while downward momentum has not improved by much, the risk for GBP is still on the downside. We indicated the next level to watch is at 1.1580. GBP subsequently dropped to 1.1599 before settling at 1.1622 (-0.27%). The downside risk is still intact and a break of 1.1580 would shift the focus to 1.1530. On the upside, a break of 1.1700 (‘strong resistance’ level was at 1.1755 yesterday) would indicate that GBP is not weakening further.”