GBP/USD Declines Amid Fresh Bearish Pressure

GBP/USD Outlook: Renewed Downward Momentum Points to 1.3210 – UOB Group

The Pound Sterling (GBP) extended its losses against the United States Dollar (USD) on Wednesday, with analysts at UOB Group and OCBC Bank warning that the pair could decline further toward the 1.3210 support level. The move comes after a sharp and unexpected drop in GBP/USD, which tested the 1.3248 area despite earlier signs of stabilization.

24-Hour View: Short-Term Pressure Persists

According to OCBC’s FX strategists Frances Cheung and Christopher Wong, the Pound had initially shown a firmer underlying tone, with expectations that it would trade in a higher range of 1.3320–1.3370. Indeed, GBP/USD briefly tested the upper bound at 1.3368, but the rally quickly reversed, sending the pair tumbling to 1.3248.

• Analysts note that the decline appears excessive, yet there are still no clear signs of stabilization.
• This leaves the door open for a test of 1.3240, though oversold conditions suggest that a sustained break below this level is less likely.
• Immediate resistance is seen at 1.3295, followed by 1.3310. A move above these levels would indicate that the weakness is beginning to stabilize.

1–3 Weeks View: Renewed Downside Risks

In their medium-term outlook, UOB analysts highlighted last week that for a continued decline to materialize, GBP/USD would need to close below 1.3295. That condition was not met at the time, and momentum appeared to be fading. However, the sharp drop to 1.3248 has reignited bearish pressure.

• The renewed downward momentum suggests that GBP/USD could extend losses toward the 1.3210 support zone.
• On the upside, the “strong resistance” level has now shifted lower to 1.3340 (previously 1.3385). A break above this level would imply that the pair has likely entered a range-trading phase rather than continuing its decline.

Broader Market Context

The weakness in the Pound comes amid a stronger United States Dollar, supported by safe-haven demand and expectations surrounding the Federal Reserve’s monetary policy. Investors are closely watching the outcome of the two-day FOMC meeting, where the central bank is widely expected to adjust its policy stance in response to slowing growth and persistent inflationary pressures.

Meanwhile, political and fiscal developments in the United Kingdom continue to weigh on sentiment. Market participants remain cautious about the upcoming Autumn Budget, where the Chancellor is expected to announce a mix of tax increases and spending cuts to address fiscal challenges.

On the geopolitical front, tensions between the United States and other global powers remain a background factor influencing safe-haven flows. The President of the United States recently canceled a planned meeting with Russian President Vladimir Putin, underscoring the fragile state of international relations.

Technical Analysis: Key Levels to Watch

• Support: 1.3240 (near-term), followed by 1.3210 (major support)
• Resistance: 1.3295 (initial), 1.3310 (secondary), and 1.3340 (strong resistance)
• Indicators: The pair trades below its 200-day EMA, while the 14-day RSI remains under pressure, signaling continued bearish momentum.

Conclusion

The Pound Sterling remains under heavy selling pressure against the United States Dollar. While oversold conditions may limit the depth of the decline, the risk of a further move toward 1.3210 cannot be ruled out. Only a recovery above 1.3340 would signal that the pair has shifted into a consolidation phase, easing immediate downside risks.