UOB’s Quek Ser Leang and Lee Sue Ann note GBP/USD remains under pressure after last week’s plunge, with scope for another test of 1.3300 before a recovery. They stress that a clear break below 1.3300 would open the way toward 1.3240, while resistance at 1.3410 caps, and see the broader pair in a range with key supports at 1.3210 and 1.3160.

Pound stays pressured near key support

"24-HOUR VIEW: Following the sharp plunge in GBP that reached a low of 1.3332 last Friday, we stated the following yesterday: “While the sharp decline appears excessive, there is scope for GBP to test 1.3300 before stabilisation can be expected. A break below this level is not ruled out, but deeply oversold conditions suggest GBP might not be able to maintain a foothold below this level. On the upside, resistance levels are at 1.3360 and 1.3390.” GBP did not quite test 1.3300 as it dipped to 1.3307 in the early London session before recovering to a high of 1.3369. GBP eased from the high and closed marginally higher by 0.01% at 1.3338. Although downward momentum has slowed somewhat, there is scope for GBP to test 1.3300 before another recovery can be expected. The next support at 1.3275 is unlikely to come under threat. Resistance is at 1.3355, followed by 1.3370."

"1-3 WEEKS VIEW: Our update from yesterday (08 Jun, spot at 1.3330) remains valid. As indicated, while the sharp drop last Friday “highlights the prevailing GBP weakness, GBP must break clearly below 1.3300 before further declines toward 1.3240 can be expected.” The likelihood of GBP breaking clearly below 1.3300 will remain intact as long as GBP holds below 1.3410 (no change in ‘strong resistance’ level)"

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)