GBP/USD room for a test of 1.2850 – UOB

In opinion of the research team at UOB Group, there is still room for GBP/USD to test of the mid-1.2800s in the near term.

Key Quotes

“The sharp drop from last Friday's NY high of 1.3035 appears to have scope to extend lower. However, downward momentum is not strong and any further decline is expected to encounter solid support at 1.2845/50. On the upside, only a move back above 1.2965 would indicate that the immediate downward pressure has eased”.

“The slow drift lower in GBP is in line with our bearish expectation. The target is still at 1.2850 but as highlighted yesterday, the internal momentum is not strong and this level is unlikely to yield so easily. Those who are short may likely to take partial profit at this level. In the meanwhile, the stop-loss for the bearish is view is adjusted lower to 1.3075 from 1.3130 previously”.