GBP/USD: The pound could trade within the 1.3400/1.3535 range after increased downside pressure

UOB Group analysts warn that downside pressure on the British pound is intensifying, but any correction is likely to stay within an lower band of 1.3400 to 1.3535. According to analysis by Quek Ser Leang and Peter Chia, the recent movement suggests that traders are looking to define new support levels in the short term.

Short-term scenario (24 hours)

When GBP trades around 1.3460, analysts anticipated a test of the 1.3435 level. Although the pound declined and touched 1.3418, it later recovered to close at 1.3442, representing a daily loss of 0.11%. The movement suggests that selling momentum is weakening, although there is a possibility that GBP will attempt the 1.3420 zone again. The critical support at 1.3400 remains a firm level that is unlikely to be broken. On the upside, traders observe resistance at 1.3460 and 1.3475.

Medium-term outlook (1-3 weeks)

Strategically, the analysis maintains that downward pressure on the pair is intensifying. As noted in the previous session (January 8), with spot at 1.3460, the weakness of the British pound will probably continue within the 1.3400/1.3535 range. This range defines the baseline scenario for the coming weeks. However, there is a risk scenario: if GBP decisively breaks below 1.3400, it could trigger a more pronounced and sustained decline. Traders should monitor this level closely, as a break would mark a significant change in the short-term dynamics of the pair.