GBP/USD now targets 1.2675 near term – UOB

According to FX Strategists at UOB Group, Cable could slip back and test 1.2675 in the next weeks.

Key Quotes

24-hour view: “The ‘target’ indicated at 1.2775 last Friday was exceeded as GBP not only took out this level with ease but tested the next support at 1.2735 (low of 1.2723 last Friday). The sharp decline is severely oversold and while further GBP weakness is not ruled out in the days ahead, we do not expect GBP to maintain the pace of its recent decline. For today, a retest of the 1.2725 level would not be surprising but the next major support at 1.2675 is likely out of reach. Stabilization is only upon a move back above 1.2820 (minor resistance is at 1.2790)”.

Next 1-3 weeks: “The bearish ‘target’ indicated at 1.2775 was exceeded as GBP extended its multi-day decline and hit a low of 1.2723 last Friday (10 Aug). As highlighted, the next support below 1.2775 is at 1.2675 and this revised ‘target’ appears to be within reach sometimes this week. The next support below 1.2675 is another 85 pips lower at 1.2590. All in, while the current decline is in oversold territory, there is no sign of stabilization just yet and further weakness still seems likely. On the upside, the ‘stop-loss’ level is currently at 1.2880 (previously at 1.2940)”.