In the opinion of Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, the downtrend in GBP/USD should pick up further pace once 1.1330 is cleared.

Key Quotes

24-hour view: “Yesterday, we expected GBP to ‘trade in a choppy manner between 1.1430 and 1.1550’. Our view for choppy trading was not wrong even though GBP traded within a much wider range than expected (1.1388/1.1565). The weak daily closing of 1.1390 (-0.83%) suggests downside risk for GBP today. That said, a sustained drop below the major support at 1.1330 is unlikely (next support is at 1.1260). Resistance is at 1.1430, followed by 1.1480.”

Next 1-3 weeks: “Our latest narrative was from Tuesday (01 Nov, spot at 1.1470) where GBP ‘appears to have moved into a consolidation phase and is likely to trade between 1.1330 and 1.1635 for the time being’. Yesterday (02 Nov), GBP dropped sharply to 1.1388 and short-term downward momentum is beginning to improve. That said, GBP has to break below 1.1330 before a sustained decline is likely. The chance of GBP breaking 1.1330 would remain intact as long as GBP does not move above the ‘strong resistance’ level (currently at 1.1525) within the next couple of days.”