GBP/USD: Downward momentum is beginning to build - UOB Group

Pound Sterling (GBP) may retest the 1.3385 level; a sustained break below this level seems unlikely for now. In the longer run, downward momentum is beginning to build; it may take a while before 1.3335 comes into view, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

It may take a while before 1.3335 comes into view

24-HOUR VIEW: "After GBP fell to 1.3383 and rebounded strongly, we highlighted the following last Friday: 'Although the rebound seems stretched, GBP could test 1.3500 before a pause or pullback is likely. The strong resistance at 1.3520 is unlikely to come under threat.' Our assessment was not wrong, as GBP rose to 1.3511 and then pulled back to close at 1.3451. Today, GBP dropped sharply on the open, and downward momentum is building. GBP may retest the 1.3385 level, but a sustained break below this level seems unlikely for now. Resistance is at 1.3445 and 1.3465."

1-3 WEEKS VIEW: "Last Thursday, 19 Jun, when GBP was at 1.3415), we indicated that "downward momentum is beginning to build, but it may take a while before 1.3335 comes into view." We also indicated that 'only a break of 1.3520 ('strong resistance' level) would mean that the buildup in momentum has faded.' Last Friday, GBP rose to 1.3511 and then pulled back. As our levels remains intact, we continue to hold the same view."