GBP/USD: Losses seen accelerating below 1.1950 – UOB

Downward momentum is expected to pick up pace once GBP/USD leaves behind the 1.1950 level in the next few weeks, note UOB Group’s Economist Lee Sue Ann and Market Strategist Quek Ser Leang.

Key Quotes

24-hour view: “We highlighted yesterday that ‘while there is room for GBP to weaken further, it is unlikely to break the major support at 1.2000’. The anticipated weakness exceeded our expectations as it dropped to 1.1993 before rebounding slightly. Downward momentum has improved a tad and GBP is likely to edge lower today but it is unlikely to threaten the support at 1.1950. Resistance is at 1.2040, a breach of 1.2065 would indicate that the current mild downward pressure has eased.”

Next 1-3 weeks: “Two days ago (22 Feb, spot at 1.2115), we held the view that ‘the current price movements appear to be part of a broad consolidation range’ and we expected GBP to trade between 1.2000 and 1.2210. Yesterday, GBP dipped below 1.2000 as it dropped to 1.1993. Downward momentum is showing signs of building but GBP has to break the major support at 1.1950 before a sustained decline is likely. The chance of GBP breaking below 1.1950 is low at this stage, but it would remain intact as long as GBP stays below 1.2105 within the next few days.”