There is a chance for GBP to test 1.3355; the next support at 1.3315 is likely out of reach for now. In the longer run, outlook for GBP is negative; it could decline to 1.3355, potentially reaching 1.3315, UOB Group's FX analysts Quek Ser Leang and Lee Sue Ann note.

Outlook for GBP is negative

24-HOUR VIEW: "GBP traded sideways two days ago. Yesterday, we expected GBP to continue to 'trade sideways between 1.3410 and 1.3460'. However, instead of trading sideways, GBP dropped sharply to a low of 1.3364. While the sharp drop appears to be running ahead of itself, there is a chance for GBP to test 1.3355. The next support at 1.3315 is likely out of reach for now. On the upside, resistance levels are at 1.3400 and 1.3415."

1-3 WEEKS VIEW: "Our most recent narrative was from Tuesday (13 Jan, spot at 1.3465), in which we indicated that the recent price action suggests that GBP 'is likely in a range-trading phase, probably between 1.3390 and 1.3520'. After trading within the range for a few days, GBP broke below 1.3390 yesterday, as it plummeted to a low of 1.3364. Given the rapid increase in downward momentum, we are revising our GBP outlook to negative, and now expect GBP to decline to 1.3355, potentially 1.3315. On the upside, a break above 1.3445 (‘strong resistance’ level) would invalidate our view."