GBP/USD: Likely to decline further - UOB Group

Pound Sterling (GBP) is likely to decline further, potentially testing the support at 1.3190. In the longer run, scope for GBP to weaken to 1.3150; currently it is unclear whether GBP can break clearly below this level, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Scope for GBP to weaken to 1.3150

24-HOUR VIEW: "Yesterday, we indicated that 'provided that GBP remains below 1.3335, it could edge lower to 1.3265.' We were incorrect, as GBP popped to a high of 1.3355 before dropping sharply to 1.3238 in the late NY session. Given the rapid increase in momentum, GBP is likely to decline further, potentially testing the support at 1.3190. The major support at 1.3150 is likely out of reach. To keep the momentum going, any intraday recovery must not break above 1.3285 (minor resistance is at 1.3260)."

1-3 WEEKS VIEW: "We indicated two days ago (07 May, spot at 1.3350) that 'The current price movements are part of a 1.3240/1.3450 range-trading phase.' Yesterday, GBP fell to a low of 1.3238 and it continued to decline in early Asian trade today. While there has been no significant increase in downward momentum, there is scope for GBP to weaken to 1.3150. Currently, it is unclear whether GBP can break clearly below this level. The downside risk will remain intact as long as 1.3320 ('strong resistance' level) is not breached."