GBP/USD: Any Decline Expected to Face Significant Support at 1.2610 – UOB Group

GBP/USD: Any Decline Expected to Face Significant Support at 1.2610 – UOB Group

News Update | 12/13/2024 10:18:40 GMT 

The Pound Sterling (GBP/USD) experienced a sharp sell-off, but analysts from UOB Group, Quek Ser Leang and Lee Sue Ann, believe the decline seems excessive. The GBP is expected to consolidate within a range of 1.2650 to 1.2725 in the near term, with any further downside likely encountering significant support around the 1.2610 level.

GBP/USD: Short-Term and Long-Term Perspectives

24-Hour View

Yesterday, GBP briefly surpassed the upper end of its expected range of 1.2720/1.2785, reaching a high of 1.2787, before plummeting sharply to a low of 1.2668. GBP closed the day 0.61% lower at 1.2673.

The swift drop appears overextended, and further weakening is unlikely today. Instead, the GBP is expected to consolidate its losses, trading between 1.2650 and 1.2725.

1-3 Weeks View

UOB Group maintained a positive view on GBP earlier this week, expecting upward momentum. However, GBP’s failure to hold above 1.2810 on Wednesday and the subsequent sharp decline below the strong support level of 1.2700 have shifted the momentum downward.

The bias for GBP is now tilted to the downside. Any further decline, however, is expected to face significant support at 1.2610. The downward trend will remain intact as long as GBP does not break above the strong resistance level at 1.2755.

Technical Levels

• Immediate Support: 1.2610
• Immediate Resistance: 1.2725
• Strong Resistance: 1.2755
• Key Psychological Level: 1.2810

Key Takeaways

• Consolidation Likely: GBP/USD is likely to trade within a range of 1.2650 to 1.2725 in the short term.
• Downward Momentum: Despite the bias toward a downside, significant support at 1.2610 should limit further losses.
• Watch Resistance Levels: A breach above 1.2755 could negate the bearish outlook.