In opinion of FX Strategists at UOB Group, GBP/USD remains poised to extend the decline in the short-term horizon.

Key Quotes

24-hour view: “Our expectations for GBP to ‘trade sideways’ yesterday were incorrect as it plummeted to 1.3445 during NY session. Despite the decline, downward momentum has not improved by all that much. While there is room for GBP to drop below 1.3430, the next major support at 1.3400 could be out of reach. On the upside, a breach of 1.3500 (minor resistance is at 1.3475) would indicate that the current downward pressure has eased.”

Next 1-3 weeks: “In our latest narrative from Tuesday (25 Jan, spot at 1.3485), we highlighted that while further GBP weakness is likely, oversold shorter-term conditions suggest that a slower pace of decline and the next support at 1.3400 may not come into the picture so soon. There is no change in our view for now. Overall, the downside risk is intact as long as GBP does not move above the ‘strong resistance’ at 1.3545 (level was at 1.3575 yesterday).”