GBP/USD focus on next support at 1.15 – UOB

The research team at UOB Group sees the next relevant support for GBP/USD around the 1.1500 region.

Key Quotes

“The inexplicable plunge below 1.2000 just a while ago and the almost instantaneous rebound has resulted in a very mixed outlook. Volatility is expected to remain at elevated levels and further choppy trading can be expected, likely within a very broad 1.2000 and 1.2600”.

“GBP inexplicably plunged below 1.2000 during early Tokyo hours earlier. The outsized drop took out several major supports and the decline that started since mid-September is clearly not over. From here, a move back above yesterday’s NY closing of 1.2610 seems unlikely but in view of the dramatic drop earlier, it is also unlikely that we would see a ‘straight line’ down to the next support at 1.1500”.

“In other words, volatility is expected to remain at elevated level but as long as 1.2610 is not taken out, the pressure is still on the downside”.