Further weakness could drag GBP/USD to the 1.1630 region in the next few weeks, note FX Strategists at UOB Group Quek Ser Leang and Peter Chia.

Key Quotes

24-hour view: “We expected GBP to ‘trade sideways between 1.1770 and 1.1870’ last Friday. However, GBP spiked to 1.1900 before plunging to close at 1.1730 (-0.91%). GBP dropped sharply during early Asian hours and the rapid build-up in downward momentum is likely to lead to further decline. That said, the major support at 1.1630 is likely out of reach for now (there is another support at 1.1660). Resistance is at 1.1730 but only a breach of 1.1760 would indicate that the current weakness has stabilized.”

Next 1-3 weeks: “Our latest narrative was from last from Wednesday (24 Aug, spot at 1.1830) where GBP is likely to consolidate and trade between 1.1720 and 1.1930. GBP plummeted to 1.1730 last Friday before breaking clearly 1.1700 during early Asian hours. Downward momentum has improved quickly and the price actions suggest GBP could weaken towards 1.1630. Overall, GBP is expected to trade on its back foot unless it can move above the ‘strong resistance’ level, currently at 1.1800.”