According to Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, the downward bias in GBP/USD appears to be losing its momentum, suggesting a potential shift in the market sentiment.
Analyzing the 24-hour view, it was anticipated that GBP would undergo sideways trading within the range of 1.2420/1.2500. Interestingly, GBP exhibited a trading pattern between 1.2414 and 1.2471 before concluding the session with minimal change at 1.2437, representing a marginal decline of 0.07%. Given this, it wouldn't be surprising to witness continued sideways trading in the near future, with a likely range between 1.2400 and 1.2480.
Zooming out and considering the next 1-3 weeks, the experts uphold the same perspective as the previous day (22 May) when the spot stood at 1.2460. As previously highlighted, the downward momentum has exhibited signs of deceleration, yet the situation remains precarious. Only a definitive breakthrough above the enduringly robust resistance level of 1.2500 would signify the termination of the GBP's persistent weakness that has persisted for over a week (referencing the annotations in the chart below). Moving forward, if GBP were to decline below 1.2390 within the upcoming days, the subsequent significant level to monitor would be 1.2350.
In summary, the analysis by Economist Lee Sue Ann and Markets Strategist Quek Ser Leang suggests that the downward bias in GBP/USD is waning, indicating the potential for a shift in the market dynamics. Although sideways trading is expected to persist, a breakthrough above the formidable resistance level of 1.2500 would signify the end of the prevailing GBP weakness. Conversely, should GBP depreciate below 1.2390 in the coming days, the focus would shift to the subsequent support level at 1.2350..
H4 chart look:
