United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann highlight that GBP/USD briefly broke below 1.3160 to 1.3140 before recovering to 1.3170, with intraday price action expected to probe 1.3130 while keeping 1.3110 out of reach. On a 1–3 week basis, they maintain a negative stance, seeing a chance of a move to 1.3110 as long as 1.3245 caps rebounds.

Sterling bias still tilted lower

"24-HOUR VIEW: Yesterday, we held the view that GBP “could edge lower and test 1.3160.” However, we stated that “it is too early to determine whether GBP can break and hold below this level.” GBP subsequently broke below 1.3160, dropped to 1.3140 before recovering to close at 1.3170 (-0.26%). There has been no further increase in downward momentum, but today, GBP could test 1.3130 before any recovery is likely. The major support at 1.3110 is likely out of reach. Resistance is at 1.3185; a breach of 1.3200 would indicate that GBP is more likely to range-trade rather than testing 1.3135."

"1-3 WEEKS VIEW: We turned negative on GBP one week ago. In our most recent narrative from last 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.” It took a few days, but yesterday, GBP finally fell and broke below 1.3160, printing a low of 1.3140. Despite the decline, downward momentum has not increased much. However, there is a chance for GBP to drop to 1.3110. We will maintain this view as long as GBP holds below 1.3245 (‘strong resistance’ level was at 1.3265 yesterday)."

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