GBP/USD: A breach of 1.3600 is not ruled out – UOB

A breakdown of the 1.3600 level in Cable still remains in the pipeline, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected GBP to ‘break the 1.3640 support’ yesterday but we were of the view that ‘the August’s low near 1.3600 is unlikely to come into the picture’. Our view was not wrong as GBP dropped to 1.3610 before settling at 1.3620 (-0.30%). While there is scope for GBP to dip below 1.3600 today, the next support at 1.3570 could be out of reach. Resistance is at 1.3650 followed by 1.3680.”

Next 1-3 weeks: “We noted yesterday (22 Sep, spot at 1.3660) that GBP is likely to weaken further but any weakness is expected to encounter solid support at 1.3600. GBP dropped to 1.3610 during NY session and the improved downward momentum indicates that a break of 1.3600 would not be surprising. The next support levels are at 1.3570 followed by 1.3530. The current downward pressure is deemed intact as long as GBP does not move above 1.3705 (‘strong resistance’ level was at 1.3745 yesterday).”