FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang note GBP/USD is unlikely to break below the 1.1400 level in the near term.

Key Quotes

24-hour view: “We highlighted yesterday that GBP ‘could drop to 1.1465 first before stabilizing’. Our expectations did not materialize as GBP dropped to 1.1480 before rebounding quickly to 1.1589. The price actions appear to be part of a consolidation and GBP is expected to trade sideways for today, albeit likely within a higher range of 1.1500/1.1600.”

Next 1-3 weeks: “We continue to hold the same view as from yesterday (14 Sep, spot at 1.1510). As highlighted, GBP is likely to stay under pressure for now but at this stage, the chance for GBP to break the major support at 1.1400 is not high. On a shorter-term note, 1.1450 is already quite a solid support. On the upside, a breach of 1.1630 (no change in ‘strong resistance’ level from yesterday) would indicate that the current downward pressure has eased.”