United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann stay bearish on GBP/USD after the pair slipped to 1.3183, with downside momentum modest but building. Intraday, he sees scope for a test of the major 1.3160 support, while resistance is at 1.3235. Over 1–3 weeks, they still look for a break below 1.3160, targeting 1.3110 if 1.3265 caps.

Sterling remains on the defensive

"24-HOUR VIEW: GBP rebounded to a high of 1.3272 two days ago before pulling back. When GBP was at 1.3250 in the early Asian session yesterday, we highlighted that “the price action did not result in any clear shift in either downward or upward momentum,” and we expected GBP to “range-trade between 1.3205 and 1.3275.” Our assessment was incorrect, as instead of range-trading, GBP fell to a low of 1.3183. Downward momentum has increased, but not significantly. Today, GBP could edge lower and test the major support at 1.3160. Currently, it is too early to determine whether GBP can break and hold below this level. To keep the momentum going, GBP must not break above 1.3235 (minor resistance is at 1.3215)."

"1-3 WEEKS VIEW: We turned negative on GBP last Thursday (18 Jun, spot at 1.3300). In our most recent narrative from Friday (19 Jun, spot at 1.3205), we indicated that GBP “is expected to continue to weaken, and the next level to watch is 1.3160.” Although 1.3160 remains untested, as long as 1.3265 (‘strong resistance’ level previously at 1.3305) is not breached, there remains a chance for a break below this level. Looking ahead, the next level to watch below 1.3160 is 1.3110."

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