It is possible that the British pound will fall further. Deep oversold conditions indicate that the price is unlikely to fall below the 1.3000 level. In the longer term, there is room for the British pound to test the important support level at 1.3000, noted UOB Group FX analysts Kwik Ser Liang and Peter Chia.
The British pound is testing the important support level at 1.3000
24 Hour View: “We did not expect the sharp drop in GBP that sent it as low as 1.3043 (we were expecting range trading). While GBP could fall further, oversold conditions suggest it is unlikely to break below the key support level at 1.3000 (there is another support level at 1.3030). Resistance is at 1.3085; a break of 1.3105 would indicate that Weakness in sterling stabilizes.”
1-3 week view: “Last Friday (14 November, spot at 1.3160), we were of the view that GBP “may test 1.3240”. In our latest narrative from two days ago (18 November, spot at 1.3150), we highlighted that “the build-up of bullish momentum is starting to slow, and a break of 1.3105 (the ‘strong support’ level) would indicate that the pound Sterling is more likely to trade in a range rather than rising to test 1.3240. Yesterday, in a surprise move, the British pound fell to a low of 1.3043. There has been a rapid increase in bearish momentum. There is room for the British pound to test the important support level at 1.3000. To maintain the momentum, the British pound must remain below 1.3150 (the “strong resistance” level).
