United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note that GBP/USD remains in a corrective phase after testing April’s low near 1.3160 and rebounding. They expect near-term range trading between 1.3170 and 1.3245, but maintain a negative 1–3 week view, seeing potential for a break below 1.3160 as long as resistance at 1.3305 caps the upside.

Sterling stays pressured below resistance

"24-HOUR VIEW: When GBP was at 1.3205 in the early Asian session last Friday, we held the view that “it could weaken further.” However, we indicated that “conditions remain deeply oversold, and any decline may not break below April’s low of 1.3160.” Our view was not wrong, as GBP fell to a low of 1.3164 before rebounding. The current price movements are likely part of a range-trading phase. Today, we expect GBP to trade between 1.3170 and 1.3245."

"1-3 WEEKS VIEW: We turned negative on GBP last Thursday (18 Jun, spot at 1.3300). We highlighted that the sharp drop in GBP “suggests further weakness,” but we pointed out that “it is worth noting that there is a major support at 1.3240.” After GBP broke below 1.3240, we highlighted on Friday (19 Jun, spot at 1.3205) that GBP “is expected to continue to weaken, and the next level to watch is 1.3160.” GBP subsequently dropped to a low of 1.3164 before rebounding. There has been a tentative slowdown in downward momentum, but as long as 1.3305 (no change in ‘strong resistance’ level) is not breached, there is still a chance for GBP to break below 1.3160."

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